Insolvency Act 1986

258 Decisions of creditor’s meeting. E+W

(1) A creditors’ meeting summoned under section 257 shall decide whether to approve the proposed voluntary arrangement.

(2) The meeting may approve the proposed voluntary arrangement with modifications, but shall not do so unless the debtor consents to each modification.

(3) The modifications subject to which the proposed voluntary arrangement may be approved may include one conferring the functions proposed to be conferred on the nominee on another person qualified to act as an insolvency practitioner [F1 or authorised to act as nominee, in relation to the voluntary arrangement].

But they shall not include any modification by virtue of which the proposal ceases to be a proposal [F1 under this Part].

(4) The meeting shall not approve any proposal or modification which affects the right of a secured creditor of the debtor to enforce his security, except with the concurrence of the creditor concerned.

(5) Subject as follows, the meeting shall not approve any proposal or modification under which—

(a) any preferential debt of the debtor is to be paid otherwise than in priority to such of his debts as are not preferential debts, F2 ...

[F3 (aa) any ordinary preferential debt of the debtor is to be paid otherwise than in priority to any secondary preferential debts that the debtor may have,]

(b) a preferential creditor of the debtor is to be paid an amount in respect of [F4 an ordinary preferential debt] that bears to that debt a smaller proportion than is borne to [F5 another ordinary] preferential debt by the amount that is to be paid in respect of that other debt [F6 , or

(c) a preferential creditor of the debtor is to be paid an amount in respect of a secondary preferential debt that bears to that debt a smaller proportion than is borne to another secondary preferential debt by the amount that is to be paid in respect of that other debt.]

However, the meeting may approve such a proposal or modification with the concurrence of the preferential creditor concerned.

(6) Subject as above, the meeting shall be conducted in accordance with the rules.

(7) In this section “preferential debt” [F7 , "ordinary preferential debt” and “secondary preferential debt” each has] the meaning given by section 386 in Part XII; and “preferential creditor” is to be construed accordingly.

Textual Amendments

F1 Words in s. 258(3) substituted (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 9; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F2 Word in s. 258(5)(a) omitted (1.1.2015) by virtue of The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 6(2)(a) (with art. 3)

F3 S. 258(5)(aa) inserted (1.1.2015) by The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 6(2)(b) (with art. 3)

F4 Words in s. 258(5)(b) substituted (1.1.2015) by The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 6(2)(c)(i) (with art. 3)

F5 Words in s. 258(5)(b) substituted (1.1.2015) by The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 6(2)(c)(ii) (with art. 3)

F6 S. 258(5)(c) and word inserted (1.1.2015) by The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 6(2)(d) (with art. 3)

F7 Words in s. 258(7) substituted (1.1.2015) by The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 6(3) (with art. 3)

Modifications etc. (not altering text)

C1 Ss. 256-263 applied (with modifications) by S.I. 1986/1999, art. 3, Sch. I Pt. III

C2 S. 258 modified (10.8.2005) by The Insurers (Reorganisation and Winding Up) Regulations 2004 (S.I. 2004/353), reg. 33(5) (as modified (10.8.2005) by S.I. 2005/1998, regs. 2(3), {40(1)-(4)(11)})