PART 2Amendments of Insolvency Act 1986

Moratorium where directors propose voluntary arrangement and preferential debtsI19

1

Schedule A116 to the Insolvency Act 1986 (moratorium where directors propose voluntary arrangement) is amended as follows.

2

In paragraph 31(5)—

a

omit the “or” at the end of paragraph (a);

b

after paragraph (a) insert—

aa

any ordinary preferential debt of the company is to be paid otherwise than in priority to any secondary preferential debts that it may have,

c

in paragraph (b)—

i

for “a preferential debt”, substitute “an ordinary preferential debt”, and

ii

for “another”, substitute “another ordinary”;

d

at the end of paragraph (b), insert—

or

c

a preferential creditor of the company 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.

3

In paragraph 31(8), after “preferential debts” insert “, ordinary preferential debts, secondary preferential debts”.