Office of Public Sector Information
SCHEDULE 16 continued
90 Paragraphs 91 to 95 apply where an administrator—
(a) dies,
(b) resigns,
(c) is removed from office under paragraph 88, or
(d) vacates office under paragraph 89.
91 (1) Where the administrator was appointed by administration order, the court may replace the administrator on an application under this sub-paragraph made by—
(a) a creditors' committee of the company,
(b) the company,
(c) the directors of the company,
(d) one or more creditors of the company, or
(e) where more than one person was appointed to act jointly or concurrently as the administrator, any of those persons who remains in office.
(2) But an application may be made in reliance on sub-paragraph (1)(b) to (d) only where—
(a) there is no creditors' committee of the company,
(b) the court is satisfied that the creditors' committee or a remaining administrator is not taking reasonable steps to make a replacement, or
(c) the court is satisfied that for another reason it is right for the application to be made.
92 Where the administrator was appointed under paragraph 14 the holder of the floating charge by virtue of which the appointment was made may replace the administrator.
93 (1) Where the administrator was appointed under paragraph 22(1) by the company it may replace the administrator.
(2) A replacement under this paragraph may be made only—
(a) with the consent of each person who is the holder of a qualifying floating charge in respect of the company’s property, or
(b) where consent is withheld, with the permission of the court.
94 (1) Where the administrator was appointed under paragraph 22(2) the directors of the company may replace the administrator.
(2) A replacement under this paragraph may be made only—
(a) with the consent of each person who is the holder of a qualifying floating charge in respect of the company’s property, or
(b) where consent is withheld, with the permission of the court.
95 The court may replace an administrator on the application of a person listed in paragraph 91(1) if the court—
(a) is satisfied that a person who is entitled to replace the administrator under any of paragraphs 92 to 94 is not taking reasonable steps to make a replacement, or
(b) that for another reason it is right for the court to make the replacement.
96 (1) This paragraph applies where an administrator of a company is appointed under paragraph 14 by the holder of a qualifying floating charge in respect of the company’s property.
(2) The holder of a prior qualifying floating charge in respect of the company’s property may apply to the court for the administrator to be replaced by an administrator nominated by the holder of the prior floating charge.
(3) One floating charge is prior to another for the purposes of this paragraph if—
(a) it was created first, or
(b) it is to be treated as having priority in accordance with an agreement to which the holder of each floating charge was party.
(4) Sub-paragraph (3) shall have effect in relation to Scotland as if the following were substituted for paragraph (a)—
“(a) it has priority of ranking in accordance with section 464(4)(b) of the Companies Act 1985 (c. 6),”.
97 (1) This paragraph applies where—
(a) an administrator of a company is appointed by a company or directors under paragraph 22, and
(b) there is no holder of a qualifying floating charge in respect of the company’s property.
(2) A creditors' meeting may replace the administrator.
(3) A creditors' meeting may act under sub-paragraph (2) only if the new administrator’s written consent to act is presented to the meeting before the replacement is made.
98 (1) Where a person ceases to be the administrator of a company (whether because he vacates office by reason of resignation, death or otherwise, because he is removed from office or because his appointment ceases to have effect) he is discharged from liability in respect of any action of his as administrator.
(2) The discharge provided by sub-paragraph (1) takes effect—
(a) in the case of an administrator who dies, on the filing with the court of notice of his death,
(b) in the case of an administrator appointed under paragraph 14 or 22, at a time appointed by resolution of the creditors' committee or, if there is no committee, by resolution of the creditors, or
(c) in any case, at a time specified by the court.
(3) For the purpose of the application of sub-paragraph (2)(b) in a case where the administrator has made a statement under paragraph 52(1)(b), a resolution shall be taken as passed if (and only if) passed with the approval of—
(a) each secured creditor of the company, or
(b) if the administrator has made a distribution to preferential creditors or thinks that a distribution may be made to preferential creditors—
(i) each secured creditor of the company, and
(ii) preferential creditors whose debts amount to more than 50% of the preferential debts of the company, disregarding debts of any creditor who does not respond to an invitation to give or withhold approval.
(4) Discharge—
(a) applies to liability accrued before the discharge takes effect, and
(b) does not prevent the exercise of the court’s powers under paragraph 75.
99 (1) This paragraph applies where a person ceases to be the administrator of a company (whether because he vacates office by reason of resignation, death or otherwise, because he is removed from office or because his appointment ceases to have effect).
(2) In this paragraph—
“the former administrator” means the person referred to in sub-paragraph (1), and
“cessation” means the time when he ceases to be the company’s administrator.
(3) The former administrator’s remuneration and expenses shall be—
(a) charged on and payable out of property of which he had custody or control immediately before cessation, and
(b) payable in priority to any security to which paragraph 70 applies.
(4) A sum payable in respect of a debt or liability arising out of a contract entered into by the former administrator or a predecessor before cessation shall be—
(a) charged on and payable out of property of which the former administrator had custody or control immediately before cessation, and
(b) payable in priority to any charge arising under sub-paragraph (3).
(5) Sub-paragraph (4) shall apply to a liability arising under a contract of employment which was adopted by the former administrator or a predecessor before cessation; and for that purpose—
(a) action taken within the period of 14 days after an administrator’s appointment shall not be taken to amount or contribute to the adoption of a contract,
(b) no account shall be taken of a liability which arises, or in so far as it arises, by reference to anything which is done or which occurs before the adoption of the contract of employment, and
(c) no account shall be taken of a liability to make a payment other than wages or salary.
(6) In sub-paragraph (5)(c) “wages or salary” includes—
(a) a sum payable in respect of a period of holiday (for which purpose the sum shall be treated as relating to the period by reference to which the entitlement to holiday accrued),
(b) a sum payable in respect of a period of absence through illness or other good cause,
(c) a sum payable in lieu of holiday,
(d) in respect of a period, a sum which would be treated as earnings for that period for the purposes of an enactment about social security, and
(e) a contribution to an occupational pension scheme.
100 (1) In this Schedule—
(a) a reference to the appointment of an administrator of a company includes a reference to the appointment of a number of persons to act jointly or concurrently as the administrator of a company, and
(b) a reference to the appointment of a person as administrator of a company includes a reference to the appointment of a person as one of a number of persons to act jointly or concurrently as the administrator of a company.
(2) The appointment of a number of persons to act as administrator of a company must specify—
(a) which functions (if any) are to be exercised by the persons appointed acting jointly, and
(b) which functions (if any) are to be exercised by any or all of the persons appointed.
101 (1) This paragraph applies where two or more persons are appointed to act jointly as the administrator of a company.
(2) A reference to the administrator of the company is a reference to those persons acting jointly.
(3) But a reference to the administrator of a company in paragraphs 87 to 99 of this Schedule is a reference to any or all of the persons appointed to act jointly.
(4) Where an offence of omission is committed by the administrator, each of the persons appointed to act jointly—
(a) commits the offence, and
(b) may be proceeded against and punished individually.
(5) The reference in paragraph 45(1)(a) to the name of the administrator is a reference to the name of each of the persons appointed to act jointly.
(6) Where persons are appointed to act jointly in respect of only some of the functions of the administrator of a company, this paragraph applies only in relation to those functions.
102 (1) This paragraph applies where two or more persons are appointed to act concurrently as the administrator of a company.
(2) A reference to the administrator of a company in this Schedule is a reference to any of the persons appointed (or any combination of them).
103 (1) Where a company is in administration, a person may be appointed to act as administrator jointly or concurrently with the person or persons acting as the administrator of the company.
(2) Where a company entered administration by administration order, an appointment under sub-paragraph (1) must be made by the court on the application of—
(a) a person or group listed in paragraph 12(1)(a) to (e), or
(b) the person or persons acting as the administrator of the company.
(3) Where a company entered administration by virtue of an appointment under paragraph 14, an appointment under sub-paragraph (1) must be made by—
(a) the holder of the floating charge by virtue of which the appointment was made, or
(b) the court on the application of the person or persons acting as the administrator of the company.
(4) Where a company entered administration by virtue of an appointment under paragraph 22(1), an appointment under sub-paragraph (1) above must be made either by the court on the application of the person or persons acting as the administrator of the company or—
(a) by the company, and
(b) with the consent of each person who is the holder of a qualifying floating charge in respect of the company’s property or, where consent is withheld, with the permission of the court.
(5) Where a company entered administration by virtue of an appointment under paragraph 22(2), an appointment under sub-paragraph (1) must be made either by the court on the application of the person or persons acting as the administrator of the company or—
(a) by the directors of the company, and
(b) with the consent of each person who is the holder of a qualifying floating charge in respect of the company’s property or, where consent is withheld, with the permission of the court.
(6) An appointment under sub-paragraph (1) may be made only with the consent of the person or persons acting as the administrator of the company.
104 An act of the administrator of a company is valid in spite of a defect in his appointment or qualification.
105 A reference in this Schedule to something done by the directors of a company includes a reference to the same thing done by a majority of the directors of a company.
106 (1) A person who is guilty of an offence under this Schedule is liable to a fine (in accordance with section 430 and Schedule 10).
(2) A person who is guilty of an offence under any of the following paragraphs of this Schedule is liable to a daily default fine (in accordance with section 430 and Schedule 10)—
(a) paragraph 20,
(b) paragraph 32,
(c) paragraph 46,
(d) paragraph 48,
(e) paragraph 49,
(f) paragraph 51,
(g) paragraph 53,
(h) paragraph 54,
(i) paragraph 56,
(j) paragraph 71,
(k) paragraph 72,
(l) paragraph 77,
(m) paragraph 78,
(n) paragraph 80,
(o) paragraph 84,
(p) paragraph 86, and
(q) paragraph 89.
107 (1) Where a provision of this Schedule provides that a period may be varied in accordance with this paragraph, the period may be varied in respect of a company—
(a) by the court, and
(b) on the application of the administrator.
(2) A time period may be extended in respect of a company under this paragraph—
(a) more than once, and
(b) after expiry.
108 (1) A period specified in paragraph 49(5), 50(1)(b) or 51(2) may be varied in respect of a company by the administrator with consent.
(2) In sub-paragraph (1) “consent” means consent of—
(a) each secured creditor of the company, and
(b) if the company has unsecured debts, creditors whose debts amount to more than 50% of the company’s unsecured debts, disregarding debts of any creditor who does not respond to an invitation to give or withhold consent.
(3) But where the administrator has made a statement under paragraph 52(1)(b) “consent” means—
(a) consent of each secured creditor of the company, or
(b) if the administrator thinks that a distribution may be made to preferential creditors, consent of—
(i) each secured creditor of the company, and
(ii) preferential creditors whose debts amount to more than 50% of the total preferential debts of the company, disregarding debts of any creditor who does not respond to an invitation to give or withhold consent.
(4) Consent for the purposes of sub-paragraph (1) may be—
(a) written, or
(b) signified at a creditors' meeting.
(5) The power to extend under sub-paragraph (1)—
(a) may be exercised in respect of a period only once,
(b) may not be used to extend a period by more than 28 days,
(c) may not be used to extend a period which has been extended by the court, and
(d) may not be used to extend a period after expiry.
109 Where a period is extended under paragraph 107 or 108, a reference to the period shall be taken as a reference to the period as extended.
110 (1) The Secretary of State may by order amend a provision of this Schedule which—
(a) requires anything to be done within a specified period of time,
(b) prevents anything from being done after a specified time, or
(c) requires a specified minimum period of notice to be given.
(2) An order under this paragraph—
(a) must be made by statutory instrument, and
(b) shall be subject to annulment in pursuance of a resolution of either House of Parliament.
111 (1) In this Schedule—
“administrative receiver” has the meaning given by section 251,
“administrator” has the meaning given by paragraph 1 and, where the context requires, includes a reference to a former administrator,
“company” includes a company which may enter administration by virtue of Article 3 of the EC Regulation,
“correspondence” includes correspondence by telephonic or other electronic means,
“creditors' meeting” has the meaning given by paragraph 50,
“enters administration” has the meaning given by paragraph 1,
“floating charge” means a charge which is a floating charge on its creation,
“in administration” has the meaning given by paragraph 1,
“hire-purchase agreement” includes a conditional sale agreement, a chattel leasing agreement and a retention of title agreement,
“holder of a qualifying floating charge” in respect of a company’s property has the meaning given by paragraph 14,
“market value” means the amount which would be realised on a sale of property in the open market by a willing vendor,
“the purpose of administration” means an objective specified in paragraph 3, and
“unable to pay its debts” has the meaning given by section 123.
(2) A reference in this Schedule to a thing in writing includes a reference to a thing in electronic form.
(3) In this Schedule a reference to action includes a reference to inaction.
112 In the application of this Schedule to Scotland—
(a) a reference to filing with the court is a reference to lodging in court, and
(b) a reference to a charge is a reference to a right in security.
113 Where property in Scotland is disposed of under paragraph 70 or 71, the administrator shall grant to the disponee an appropriate document of transfer or conveyance of the property, and—
(a) that document, or
(b) recording, intimation or registration of that document (where recording, intimation or registration of the document is a legal requirement for completion of title to the property),
has the effect of disencumbering the property of or, as the case may be, freeing the property from, the security.
114 In Scotland, where goods in the possession of a company under a hire-purchase agreement are disposed of under paragraph 72, the disposal has the effect of extinguishing as against the disponee all rights of the owner of the goods under the agreement.
115 (1) In Scotland, the administrator of a company may make, in or towards the satisfaction of the debt secured by the floating charge, a payment to the holder of a floating charge which has attached to the property subject to the charge.
(2) In Scotland, where the administrator thinks that the company has insufficient property to enable a distribution to be made to unsecured creditors other than by virtue of section 176A(2)(a), he may file a notice to that effect with the registrar of companies.
(3) On delivery of the notice to the registrar of companies, any floating charge granted by the company shall, unless it has already so attached, attach to the property which is subject to the charge and that attachment shall have effect as if each floating charge is a fixed security over the property to which it has attached.
116 In Scotland, the administrator in making any payment in accordance with paragraph 115 shall make such payment subject to the rights of any of the following categories of persons (which rights shall, except to the extent provided in any instrument, have the following order of priority)—
(a) the holder of any fixed security which is over property subject to the floating charge and which ranks prior to, or pari passu with, the floating charge,
(b) creditors in respect of all liabilities and expenses incurred by or on behalf of the administrator,
(c) the administrator in respect of his liabilities, expenses and remuneration and any indemnity to which he is entitled out of the property of the company,
(d) the preferential creditors entitled to payment in accordance with paragraph 65,
(e) the holder of the floating charge in accordance with the priority of that charge in relation to any other floating charge which has attached, and
(f) the holder of a fixed security, other than one referred to in paragraph (a), which is over property subject to the floating charge.”
Enterprise Act 2002