C3C1C5C2C4C6Part 2Bank Insolvency

Annotations:
Modifications etc. (not altering text)
C3

Pt. 2 applied (with modifications) by 1986 c. 53, s. 90C (as inserted (29.3.2009) by Building Societies (Insolvency and Special Administration) Order 2009 (S.I. 2009/805), art. 2)

C4

Pt. 2: amendment to earlier affecting provision SI 2009/805, Sch. 1 (7.4.2010) by Building Societies (Insolvency and Special Administration) (Amendment) Order 2010 (S.I. 2010/1189), arts. 1(2), 2

Termination of process, &c.

I3113Company voluntary arrangement

1

A bank liquidator may make a proposal in accordance with section 1 of the Insolvency Act 1986 (company voluntary arrangement).

2

Before making a proposal the bank liquidator—

a

shall present a final report on the bank liquidation to the liquidation committee,

b

shall send a copy of the report to—

F1i

the PRA,

ia

the FCA,

ii

the FSCS,

iii

the Bank of England,

iv

the Treasury, and

v

the registrar of companies, and

c

shall make the report available to members, creditors and contributories on request.

3

A proposal may be made only with the consent of the liquidation committee.

4

The liquidation committee may consent only if—

a

it has passed a full payment resolution, and

b

the bank liquidator is satisfied, as a result of arrangements made with the FSCS, that any depositor still eligible for compensation under the scheme will be dealt with in accordance with section 99(2)(a) or (b).

5

The bank liquidator must be the nominee (see section 1(2) of the 1986 Act).

6

Part 1 of the 1986 Act shall apply to a proposal made by a bank liquidator, with the following modifications.

7

In section 3 (summoning of meetings) subsection (2) (and not (1)) applies.

8

The action that may be taken by the court under section 5(3) (effect of approval) includes suspension of the bank insolvency order.

9

On the termination of a company voluntary arrangement the bank liquidator may apply to the court to lift the suspension of the bank insolvency order.

I2114Administration

1

A bank liquidator who thinks that administration would achieve a better result for the bank's creditors as a whole than bank insolvency may apply to the court for an administration order (under paragraph 38 of Schedule B1 to the Insolvency Act 1986).

2

An application may be made only if the following conditions are satisfied.

3

Condition 1 is that the liquidation committee has passed a full payment resolution.

4

Condition 2 is that the liquidation committee has resolved that moving to administration might enable the rescue of the bank as a going concern.

5

Condition 3 is that the bank liquidator is satisfied, as a result of arrangements made with the FSCS, that any depositors still eligible for compensation under the scheme will receive their payments or have their accounts transferred during administration.

I1115Dissolution

1

A bank liquidator who thinks that the winding up of the bank is for practical purposes complete shall summon a final meeting of the liquidation committee.

2

The bank liquidator—

a

shall present a final report on the bank insolvency to the meeting,

b

shall send a copy of the report to—

F2i

the PRA,

ia

the FCA,

ii

the FSCS,

iii

the Bank of England,

iv

the Treasury, and

v

the registrar of companies, and

c

shall make the report available to members, creditors and contributories on request.

3

At the meeting the liquidation committee shall—

a

consider the report, and

b

decide whether to release the bank liquidator.

4

If the liquidation committee decides to release the bank liquidator, the bank liquidator—

a

shall notify the court and the registrar of companies, and

b

vacates office, and has release, when the court is notified.

5

If the liquidation committee decides not to release the bank liquidator, the bank liquidator may apply to the Secretary of State for release; if the application is granted, the bank liquidator—

a

vacates office when the application is granted, and

b

has release from a time determined by the Secretary of State.

6

In the case of a bank liquidator in Scotland, a reference in subsection (5) to the Secretary of State is a reference to the Accountant of Court.

7

On receipt of a notice under subsection (4)(a) the registrar of companies shall register it.

8

At the end of the period of 3 months beginning with the day of the registration of the notice, the bank is dissolved (subject to deferral under section 116).

I4116Dissolution: supplemental

1

The Secretary of State may by direction defer the date of dissolution under section 115, on the application of a person who appears to the Secretary of State to be interested.

2

An appeal to the court lies from any decision of the Secretary of State on an application for a direction under subsection (1).

3

Subsection (1) does not apply where the bank insolvency order was made by the court in Scotland; but the court may by direction defer the date of dissolution on an application by a person appearing to the court to have an interest.

4

A person who obtains deferral under subsection (1) or (3) shall, within 7 days after the giving of the deferral direction, deliver a copy of the direction to the registrar of companies for registration.

5

A person who without reasonable excuse fails to comply with subsection (4) is liable to a fine and, for continued contravention, to a daily default fine, in each case of the same amount as for a contravention of section 205(6) of the Insolvency Act 1986 (dissolution).

6

The bank liquidator may give the notice summoning the final meeting under section 115 above at the same time as giving notice of any final distribution of the bank's property; but, if summoned for an earlier date the meeting shall be adjourned (and, if necessary, further adjourned) until a date on which the bank liquidator is able to report to the meeting that the winding up of the bank is for practical purposes complete.

7

A bank liquidator must retain sufficient sums to cover the expenses of the final meeting under section 115 above.