|Previous Section||Back to Table of Contents||Lords Hansard Home Page|
Resolved in the negative, and amendment disagreed to accordingly.
The noble Lord said: My Lords, in moving Amendment No. 7 I should like to speak also to Amendments Nos. 8, 9, 10, 12, 14, 19 and 20. Opposition Amendment No. 11 is in the same group. These amendments should address the concerns of the Opposition that bona fide third parties should not have to check that certain preconditions have been met before dealing with a company which is subject to a moratorium; for example, that a disposal is for the benefit of the company. As I said in Committee, we also would not want third parties to be put off dealing with a company in a moratorium because of doubts about whether transactions entered into by the company will be valid and enforceable against that company. Therefore, we have brought forward Amendments Nos. 8 to 10 and 12 which provide that if a company enters into a transaction in breach of paragraphs 16 to 22, those transactions will still be valid and enforceable against the company. Those paragraphs deal with transactions such as disposals, payments and the obtaining of credit by a company during the moratorium.
I wonder whether the noble Baroness, Lady Buscombe, would mind me saying a few words about Amendment No. 11 at the same time. Although we recognise the concern, we consider that Amendment No. 11 does not go quite far enough. We consider it necessary to make it clear that not only transactions under paragraph 18, which Amendment 11 would provide, but also those under paragraphs 16, 17 and 19 to 22 are to be valid and enforceable against the company even if the provisions of those paragraphs have not been complied with.
We have also provided by way of Amendment No. 14 that, first, market contracts and charges under Part VII of the Companies Act 1989 and, secondly, transfer orders and collateral security as defined in the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 will also be valid and enforceable by as well as against the company, even though the company should not have entered into such a transaction in the first place. We have also provided that nothing done by or in pursuance of such a transaction is to be treated as done in contravention of paragraphs 12(1)(f), 14 or 16 to 22.
Given that companies which are party to such types of transactions are effectively banned from entering into a moratorium, that may seem a somewhat strange provision. But we have concluded that it is possible that a company in a moratorium might just
However, as companies are not supposed to enter into market contracts, give transfer orders, grant market charges or provide collateral security during a moratorium we have provided by means of Amendments Nos. 14 and 20 that if a company does enter into any such transaction when it should not, the company and its officers can be prosecuted. Amendment No. 19 is consequential on Amendment No. 20.
Baroness Buscombe: My Lords, I rise briefly to respond to the Minister and to speak to Amendment No. 11. The Minister has accepted that it would be damaging to rescue attempts if third parties were reluctant to deal with a company which is in a moratorium because of doubts as to whether the contracts would be enforceable against the company. We are pleased that the Minister has responded to our concerns. We were particularly concerned in relation to Amendment No. 11 which we put forward in Committee, on Report and again at Third Reading. We feel that the matter has now been addressed.
Lord McIntosh of Haringey: My Lords, I am grateful to the noble Baroness for her contribution on the group starting with Amendment No. 11. I forgot to speak to Amendment No. 13. Perhaps for the record I should say that Amendment No. 13 sets out more fully the two offences which are committed if a company, first, disposes of any of its property which is subject to a security without the consent of the holder of the security or leave of the court under paragraph 20 and otherwise than in accordance with the terms of the security; or, secondly, disposes of any goods in its possession under a hire purchase agreement without the consent of the owner of the goods or leave of the court under paragraph 20 and otherwise than in accordance with the terms of the agreement. I beg to move.