Application of 1985 Act in relation to distribution of assets
132.—(1) Sections 52(1) and 58(2) of the 1985 Act shall apply in relation to the special administration of an investment bank as they apply in relation to the sequestration of a debtor’s estate, subject to the modifications specified in rule 127(2) and the following paragraphs and to any other necessary modifications.
(2) In section 52, the following modifications shall be made—
(a)for subsection (2)(b) substitute—
“(b)any subsequent accounting period shall be the period of 6 months beginning with the end of the last accounting period; except that if the administrator and the creditors’ committee (or if there is no creditors’ committee, the court) agree that the accounting period shall be such other period beginning with the end of the last accounting period as may be agreed, it shall be that other period.”;
(b)in subsection (4)(a) for the reference to “the debts mentioned in subsection (1)(a) to (d) of section 51 of this Act”, there shall be substituted a reference to “the expenses of the special administration mentioned in rule 110(1) of the Investment Bank Special Administration (Scotland) Rules 2011”;
(c)in subsection (5), ignore the words from “with the consent of” to “Accountant in Bankruptcy”;
(d)in subsections (7) and (8) for the references to sections 48(5) and 49(6)(b) there should be substituted a reference to those sections as applied by rule 127; and
(e)for subsection (11) substitute—
“(11) Subject to any notification by the creditor entitled to the dividend given to the administrator that the creditor wishes the dividend to be paid to another person or that the creditor has assigned the creditor’s entitlement to another person, payment of a dividend in respect of a claim shall only be made to the creditor.”.
(3) Section 52(3) of the 1985 Act, as applied by this rule, shall apply subject to paragraph (4).
(4) The administrator may pay a dividend to secured or preferential creditors or to unsecured creditors only if—
(a)the administrator has sufficient funds for the purpose;
(b)the administrator’s statement of proposals, as approved by the creditors under Chapter 3 of Part 3, contains a proposal to make a distribution to the class of creditors in question;
(c)the payment of a dividend is consistent with the functions and duties of the administrator and any proposals made by that administrator or which the administrator intends to make; and
(d)in a special administration (bank administration) before the Bank of England has given an Objective A Achievement Notice, the administrator has the consent of the Bank of England.
(5) Where the administrator pays a dividend under section 52(3), notice of the dividend shall be given to—
(a)the FSA;
(b)in a special administration (bank insolvency), the Bank of England; and
(c)in a special administration (bank administration), notice must be given to the FSCS and, if the dividend is paid in the period before the Bank of England has given an Objective A Achievement Notice, to the Bank of England,
and in a special administration (bank administration) following transfer to a bridge bank under section 12(2) of the 2009 Act, the notice shall include details of any payment from a scheme under a resolution fund order.
(6) Where the administrator postpones a payment under section 52(5), the administrator shall notify—
(a)the FSA;
(b)in a special administration (bank insolvency), the Bank of England; and
(c)in a special administration (bank administration), the FSCS and, if the payment is made in the period before the Bank of England has given an Objective A Achievement Notice, the Bank of England.
(7) Section 58 applies with the modification that in subsections (1) and (3) for “section 57(1)(a) or 58A(3) of this Act” there is substituted “rule 133(2) of the Investment Bank Special Administration (Scotland) Rules 2011”.
Subsection (1) of section 52 has been amended by the Bankruptcy (Scotland) Act 1993 (c.6), section 11(3) and Schedule 1, paragraph 21; subsections (1) to (9) of section 52 have been amended by the Bankruptcy and Diligence etc. (Scotland) Act 2007, section 226(2), schedule 6, Part 1; subsection (2) has also been amended by section 36 of, and schedule 1, paragraph 44(1) and (2)(b) to, that Act; subsection (2ZA) has been inserted by section 36 of, and schedule 1, paragraph 44(1) and (3) to, that Act; and subsections (10) and (11) have been inserted by S.I. 2003/2109.
Subsections (1) and (3) of section 58 have been amended by the Bankruptcy (Scotland) Act 1993, Schedule 1, paragraph 25.