Insolvency Bill [H.L.] - continued        House of Lords
SCHEDULE A1, MORATORIUM WHERE DIRECTORS PROPOSE VOLUNTARY ARRANGEMENT - continued
PART IV, NOMINEES - continued

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Replacement of nominee by court
     27. - (1) The court may-
 
 
    (a) on an application made by the directors in a case where the nominee has failed to comply with any duty imposed on him under this Schedule or has died, or
 
    (b) on an application made by the directors or the nominee in a case where it is impracticable or inappropriate for the nominee to continue to act as such,
       direct that the nominee be replaced as such by another person qualified to act as an insolvency practitioner, or authorised to act as nominee, in relation to the voluntary arrangement.
 
      (2) A person may only be appointed as a replacement nominee under this paragraph if he submits to the court a statement indicating his consent to act.
 
  PART V
  CONSIDERATION AND IMPLEMENTATION OF VOLUNTARY ARRANGEMENT
 
Summoning of meetings
     28. - (1) Where a moratorium is in force, the nominee shall summon meetings of the company and its creditors for such a time, date and place as he thinks fit.
 
      (2) The persons to be summoned to a creditors' meeting under this paragraph are every creditor of the company of whose claim the nominee is aware.
 
 
Conduct of meetings
     29. - (1) Subject to the provisions of paragraphs 30 to 34, the meetings summoned under paragraph 28 shall be conducted in accordance with the rules.
 
      (2) A meeting so summoned may resolve that it be adjourned (or further adjourned).
 
      (3) After the conclusion of either meeting in accordance with the rules, the chairman of the meeting shall report the result of the meeting to the court, and, immediately after reporting to the court, shall give notice of the result of the meeting to such persons as may be prescribed.
 
 
Approval of voluntary arrangement
     30. - (1) The meetings summoned under paragraph 28 shall decide whether to approve the proposed voluntary arrangement (with or without modifications).
 
      (2) The modifications may include one conferring the functions proposed to be conferred on the nominee on another person qualified to act as an insolvency practitioner, or authorised to act as nominee, in relation to the voluntary arrangement.
 
      (3) The modifications shall not include one by virtue of which the proposal ceases to be a proposal such as is mentioned in section 1.
 
      (4) A meeting summoned under paragraph 28 shall not approve any proposal or modification which affects the right of a secured creditor of the company to enforce his security, except with the concurrence of the creditor concerned.
 
      (5) Subject to sub-paragraph (6), a meeting so summoned shall not approve any proposal or modification under which-
 
 
    (a) any preferential debt of the company is to be paid otherwise than in priority to such of its debts as are not preferential debts, or
 
    (b) a preferential creditor of the company is to be paid an amount in respect of a preferential debt that bears to that debt a smaller proportion than is borne to another preferential debt by the amount that is to be paid in respect of that other debt.
      (6) The meeting may approve such a proposal or modification with the concurrence of the preferential creditor concerned.
 
      (7) The directors of the company may, before the beginning of the period of seven days which ends with the meetings (or either of them) summoned under paragraph 28 being held, give notice to the nominee of any modifications of the proposal for which the directors intend to seek the approval of those meetings.
 
      (8) References in this paragraph to preferential debts and preferential creditors are to be read in accordance with section 386 in Part XII of this Act.
 
 
Extension of moratorium
     31. - (1) Subject to sub-paragraph (2), a meeting summoned under paragraph 28 which resolves that it be adjourned (or further adjourned) may resolve that the moratorium be extended (or further extended), with or without conditions.
 
      (2) The moratorium may not be extended (or further extended) to a day later than the end of the period of two months which begins-
 
 
    (a) where both meetings summoned under paragraph 28 are first held on the same day, with that day,
 
    (b) in any other case, with the day on which the later of those meetings is first held.
      (3) At any meeting where it is proposed to extend (or further extend) the moratorium, before a decision is taken with respect to that proposal, the nominee shall inform the meeting-
 
 
    (a) of what he has done in order to comply with his duty under paragraph 23 and the cost of his actions for the company, and
 
    (b) of what he intends to do to continue to comply with that duty if the moratorium is extended (or further extended) and the expected cost of his actions for the company.
      (4) Where, in accordance with sub-paragraph (3)(b), the nominee informs a meeting of the expected cost of his intended actions, the meeting shall resolve whether or not to approve that expected cost.
 
      (5) If a decision not to approve the expected cost of the nominee's intended actions has effect under paragraph 35, the moratorium comes to an end.
 
      (6) A meeting may resolve that a moratorium which has been extended (or further extended) be brought to an end before the end of the period of the extension (or further extension).
 
      (7) The Secretary of State may by order increase or reduce the period for the time being specified in sub-paragraph (2).
 
     32. - (1) The conditions which may be imposed when a moratorium is extended (or further extended) include a requirement that the nominee be replaced as such by another person qualified to act as an insolvency practitioner, or authorised to act as nominee, in relation to the voluntary arrangement.
 
      (2) A person may only be appointed as a replacement nominee by virtue of sub-paragraph (1) if he submits to the court a statement indicating his consent to act.
 
      (3) At any meeting where it is proposed to appoint a replacement nominee as a condition of extending (or further extending) the moratorium-
 
 
    (a) the duty imposed by paragraph 31(3)(b) on the nominee shall instead be imposed on the person proposed as the replacement nominee, and
 
    (b) paragraphs 31(4) and (5) and 35(1)(e) apply as if the references to the nominee were to that person.
     33. - (1) If a decision to extend, or further extend, the moratorium takes effect under paragraph 35, the nominee shall, in accordance with the rules, notify the registrar of companies and the court.
 
      (2) If the moratorium is extended, or further extended, by virtue of an order under paragraph 35(5), the nominee shall, in accordance with the rules, send an office copy of the order to the registrar of companies.
 
      (3) If the nominee without reasonable excuse fails to comply with this paragraph, he is liable to a fine.
 
 
Moratorium committee
     34. - (1) A meeting summoned under paragraph 28 which resolves that the moratorium be extended (or further extended) may, with the consent of the nominee, resolve that a committee be established to exercise the functions conferred on it by the meeting.
 
      (2) The meeting may not so resolve unless it has approved an estimate of the expenses to be incurred by the committee in the exercise of the proposed functions.
 
      (3) Any expenses, not exceeding the amount of the estimate, incurred by the committee in the exercise of its functions shall be reimbursed by the nominee.
 
      (4) The committee shall cease to exist when the moratorium comes to an end.
 
 
Effectiveness of decisions
     35. - (1) Sub-paragraph (2) applies to references to one of the following decisions having effect, that is, a decision, under paragraph 30, 31 or 34, with respect to-
 
 
    (a) the approval of a proposed voluntary arrangement,
 
    (b) the extension (or further extension) of a moratorium,
 
    (c) the bringing of a moratorium to an end,
 
    (d) the establishment of a committee, or
 
    (e) the approval of the expected cost of a nominee's intended actions.
      (2) The decision has effect if, in accordance with the rules-
 
 
    (a) it has been taken by both meetings summoned under paragraph 28, or
 
    (b) (subject to any order made under sub-paragraph (5)) it has been taken by the creditors' meeting summoned under that paragraph.
      (3) If a decision taken by the creditors' meeting under any of paragraphs 30, 31 or 34 with respect to any of the matters mentioned in sub-paragraph (1) differs from one so taken by the company meeting with respect to that matter, a member of the company may apply to the court.
 
      (4) An application under sub-paragraph (3) may be made during the moratorium or after it has ended.
 
      (5) On an application under sub-paragraph (3), the court may-
 
 
    (a) order the decision of the company meeting to have effect instead of the decision of the creditors' meeting, or
 
    (b) make such other order as it thinks fit.
 
Effect of approval of voluntary arrangement
     36. - (1) This paragraph applies where a decision approving a voluntary arrangement has effect under paragraph 35.
 
      (2) The approved voluntary arrangement-
 
 
    (a) takes effect as if made by the company at the creditors' meeting, and
 
    (b) binds every person who in accordance with the rules-
 
      (i) was entitled to vote at that meeting (whether or not he was present or represented at it), or
 
      (ii) would have been so entitled if he had had notice of it,
 
    as if he were a party to the voluntary arrangement.
      (3) If-
 
 
    (a) when the arrangement ceases to have effect any amount payable under the arrangement to a person bound by virtue of sub-paragraph (2)(b)(ii) has not been paid, and
 
    (b) the arrangement did not come to an end prematurely,
       the company shall at that time become liable to pay to that person the amount payable under the arrangement.
 
      (4) Where a petition for the winding up of the company, other than an excepted petition within the meaning of paragraph 12, was presented before the beginning of the moratorium, the court shall dismiss the petition.
 
      (5) The court shall not dismiss a petition under sub-paragraph (4)-
 
 
    (a) at any time before the end of the period of 28 days beginning with the first day on which each of the reports of the meetings required by paragraph 29(3) has been made to the court, or
 
    (b) at any time when an application under paragraph 37 or an appeal in respect of such an application is pending, or at any time in the period within which such an appeal may be brought.
 
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