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

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     41. - (1) If, for the purpose of obtaining a moratorium, or an extension of a moratorium, for a company, a person who is an officer of the company-
 
 
    (a) makes any false representation, or
 
    (b) fraudulently does, or omits to do, anything,
       he commits an offence.
 
      (2) Sub-paragraph (1) applies even if no moratorium or extension is obtained.
 
      (3) For purposes of this paragraph, "officer" includes a shadow director.
 
      (4) A person guilty of an offence under this paragraph is liable to imprisonment or a fine, or both.
 
 
Void provisions in floating charge documents
     42. - (1) A provision in an instrument creating a floating charge is void if it provides for-
 
 
    (a) obtaining a moratorium, or
 
    (b) anything done with a view to obtaining a moratorium (including any preliminary decision or investigation),
       to be an event causing the floating charge to crystallise or causing restrictions which would not otherwise apply to be imposed on the disposal of property by the company or a ground for the appointment of a receiver.
 
      (2) In sub-paragraph (1) "receiver" includes a manager and a person who is appointed both receiver and manager.
 
 
Subordinate legislation
     43. - (1) Regulations or an order made by the Secretary of State under this Schedule may make different provision for different cases.
 
      (2) Regulations so made may make such consequential, incidental, supplemental and transitional provision as may appear to the Secretary of State necessary or expedient.
 
      (3) Any power of the Secretary of State to make regulations under this Schedule may be exercised by amending or repealing any enactment contained in this Act (including one contained in this Schedule) or contained in the Company Directors Disqualification Act 1986.
 
      (4) Regulations (except regulations under paragraph 5) or an order made by the Secretary of State under this Schedule shall be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.
 
      (5) Regulations under paragraph 5 of this Schedule are to be made by statutory instrument and shall only be made if a draft containing the regulations has been laid before and approved by resolution of each House of Parliament."
 
     5. In section 27(3)(a) (protection of interests of creditors and members when administration order in force), "section 4 in" is omitted.
 
     6. In section 122(1) (grounds on which company may be wound up by the court), after paragraph (f) there is inserted-
 
 
    "(fa) at the time at which a moratorium for the company under section 1A comes to an end, no voluntary arrangement approved under Part I has effect in relation to the company".
     7. In section 124 (application for winding up of company), after subsection (3) there is inserted-
 
 
    "(3A) A winding-up petition on the ground set out in section 122(1)(fa) may only be presented by one or more creditors".
 
     8. - (1) Section 233 (conditions which may be imposed on supply of gas, water, electricity, etc.) is amended as follows.
 
      (2) In subsection (1)-
 
 
    (a) after paragraph (b) there is inserted-
 
    "(ba) a moratorium under section 1A is in force, or",
 
    (b) in paragraph (c), for the words from "under Part I" to "section 3" there is substituted "approved under Part I", and
 
    (c) after "receiver" (in the second place) there is inserted "the nominee,".
      (3) In subsection (4)-
 
 
    (a) after paragraph (b) there is inserted-
 
    "(ba) the date on which the moratorium came into force", and
 
    (b) in paragraph (c), for the words following "arrangement" there is substituted "took effect".
     9. In section 387 (date which determines existence and amount of preferential debt), after subsection (2) there is inserted-
 
 
    "(2A) For the purposes of paragraph 30 of Schedule A1 (meetings to consider company voluntary arrangement where a moratorium under section 1A is in force), the relevant date in relation to a company is the date of filing."
 
     10. After section 417 there is inserted-
 
 
"Money sums (company moratorium).     417A. - (1) The Secretary of State may by order increase or reduce any of the money sums for the time being specified in the following provisions of Schedule A1 to this Act-
 
 
    paragraph 17(1) (maximum amount of credit which company may obtain without disclosure of moratorium);
 
    paragraph 40(4) (minimum value of company property concealed or fraudulently removed, affecting criminal liability of company's officer).
    (2) An order under this section may contain such transitional provisions as may appear to the Secretary of State necessary or expedient.
 
      (3) An order under this section shall be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament."
 
     11. In section 432(4) (offences by bodies corporate), at the end there is inserted "and those under paragraphs 16(2), 17(3)(a), 18(3)(a), 19(3)(a) and 22(1) of Schedule A1".
 
     12. In Schedule 10 (punishment of offences), before the entry relating to paragraph 4(3) of Schedule 7 there are inserted the following entries-
 
 
 
"Sch. A1, para. 9(2).
 
Directors failing to notify nominee of beginning of moratorium.
 
1. On indictment.
2. Summary.
 
2 years or a fine, or both.
6 months or the statutory maximum, or both.
 
Sch. A1, para. 10(3).
 
Nominee failing to advertise or notify beginning of moratorium.
 
Summary.
 
One-fifth of the statutory maximum.
 
Sch. A1, para. 11(2).
 
Nominee failing to advertise or notify end of moratorium.
 
Summary.
 
One-fifth of the statutory maximum.
 
Sch. A1, para. 16(2).
 
Company and officers failing to state in correspondence etc. that moratorium in force.
 
Summary.
 
One-fifth of the statutory maximum.
 
Sch. A1, para. 17(3)(a).
 
Company obtaining credit without disclosing existence of moratorium.
 
1. On indictment.
2. Summary.
 
A fine.
The statutory maximum.
 
Sch. A1, para. 17(3)(b).
 
Obtaining credit for company without disclosing existence of moratorium.
 
1. On indictment.
2. Summary.
 
2 years or a fine, or both.
6 months or the statutory maximum, or both.
 
Sch. A1, para. 18(3)(a).
 
Company disposing of property otherwise than in ordinary way of business.
 
1. On indictment.
2. Summary.
 
A fine.
The statutory maximum.
 
Sch. A1, para. 18(3)(b).
 
Authorising or permitting disposal of company property.
 
1. On indictment.
2. Summary.
 
2 years or a fine, or both.
6 months or the statutory maximum, or both.
 
Sch. A1, para. 19(3)(a).
 
Company making payments in respect of liabilities existing before beginning of moratorium.
 
1. On indictment.
2. Summary.
 
A fine.
The statutory maximum.
 
Sch. A1, para. 19(3)(b).
 
Authorising or permitting such a payment.
 
1. On indictment.
2. Summary.
 
2 years or a fine, or both.
6 months or the statutory maximum, or both.
 
Sch. A1, para. 20(9).
 
Directors failing to send to registrar office copy of court order permitting disposal of charged property.
 
Summary.
 
One-fifth of the statutory maximum.
 
Sch. A1, para. 22(1).
 
Company disposing of charged property.
 
1. On indictment.
2. Summary.
 
A fine.
The statutory maximum.
 
Sch. A1, para. 22(2).
 
Authorising or permitting such a disposal.
 
1. On indictment.
2. Summary.
 
2 years or a fine, or both.
6 months or the statutory maximum, or both.
 
Sch. A1, para. 24(6).
 
Nominee failing to give notice of withdrawal of consent to act.
 
Summary.
 
One-fifth of the statutory maximum.
 
Sch. A1, para. 33(3).
 
Nominee failing to give notice of extension of moratorium.
 
Summary.
 
One-fifth of the statutory maximum.
 
Sch. A1, para. 40(2).
 
Fraud or privity to fraud in anticipation of moratorium.
 
1. On indictment.
2. Summary.
 
7 years or a fine, or both.
6 months or the statutory maximum, or both.
 
Sch. A1, para. 40(3).
 
Fraud or privity to fraud during moratorium.
 
1. On indictment.
2. Summary.
 
7 years or a fine, or both.
6 months or the statutory maximum, or both.
 
Sch. A1, para. 40(7).
 
Knowingly taking in pawn or pledge, or otherwise receiving, company property.
 
1. On indictment.
2. Summary.
 
7 years or a fine, or both.
6 months or the statutory maximum, or both.
 
Sch. A1, para. 41(1).
 
False representation or fraud for purpose of obtaining or extending moratorium.
 
1. On indictment.
2. Summary.
 
7 years or a fine, or both.
6 months or the statutory maximum, or both."
 
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