Law

Insolvency Act 1986

United Kingdom · statute

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In force since 2026-10-01, as the publisher states.

Copy read on 2026-11-08. The page it was read from

Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.

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Contents: 666 provisions
  1. Title and introductory text
  2. A1 Overview
  3. A2 Eligible companies
  4. A3 Obtaining a moratorium by filing or lodging documents at court
  5. A4 Obtaining a moratorium for company subject to winding-up petition
  6. A5 Obtaining a moratorium for other overseas companies
  7. A6 The relevant documents
  8. A7 Beginning of moratorium and appointment of monitor
  9. A8 Obligations to notify where moratorium comes into force
  10. A9 End of the moratorium
  11. A10 Extension by directors without creditor consent
  12. A11 Extension by directors with creditor consent
  13. A12 Creditor consent for the purposes of section A11
  14. A13 Extension by court on application of directors
  15. A14 Extension while proposal for CVA pending
  16. A15 Extension by court in the course of other proceedings
  17. A16 Company enters into insolvency procedure etc
  18. A17 Obligations to notify change in end of moratorium
  19. A18 Overview and construction of references to payment holidays
  20. A19 Publicity about moratorium
  21. A20 Restrictions on insolvency proceedings etc
  22. A21 Restrictions on enforcement and legal proceedings
  23. A22 Floating charges
  24. A23 Enforcement of security granted during moratorium
  25. A24 Duty of directors to notify monitor of insolvency proceedings etc
  26. A25 Restrictions on obtaining credit
  27. A26 Restrictions on grant of security etc
  28. A27 Prohibition on entering into market contracts etc
  29. A28 Restrictions on payment of certain pre-moratorium debts
  30. A29 Restrictions on disposal of property
  31. A30 Restrictions on disposal of hire-purchase property
  32. A31 Disposal of charged property free from charge
  33. A32 Disposal of hire-purchase property
  34. A33 Contravention of certain requirements imposed under this Chapter
  35. A34 Status of monitor
  36. A35 Monitoring
  37. A36 Provision of information to monitor
  38. A37 Application by monitor for directions
  39. A38 Termination of moratorium by monitor
  40. A39 Replacement of monitor or appointment of additional monitor
  41. A40 Application of Part where two or more persons act as monitor
  42. A41 Presumption of validity
  43. A42 Challenge to monitor’s actions
  44. A43 Challenges to monitor remuneration in insolvency proceedings
  45. A44 Challenge to directors’ actions
  46. A45 Challenge brought by Board of the Pension Protection Fund
  47. A46 Offence of fraud etc during or in anticipation of moratorium
  48. A47 Offence of false representation etc to obtain a moratorium
  49. A48 Prosecution of delinquent officers of company
  50. A49 Regulated companies: modifications to this Part
  51. A50 Power to modify this Part etc in relation to certain companies
  52. A51 Power to make provision in connection with pension schemes
  53. A52 Void provisions in floating charge documents
  54. A53 Meaning of “pre-moratorium debt” and “moratorium debt”
  55. A54 Interpretation of this Part: general
  56. A55 Regulations
  57. 1 Those who may propose an arrangement.
  58. 1A Moratorium.
  59. 2 Procedure where nominee is not the liquidator or administrator.
  60. 3 Consideration of proposal.
  61. 4 Decisions of the company and its creditors.
  62. 4A Approval of arrangement.
  63. 5 Effect of approval.
  64. 6 Challenge of decisions.
  65. 6A False representations, etc.
  66. 7 Implementation of proposal.
  67. 7A Prosecution of delinquent officers of company.
  68. 7B Arrangements coming to an end prematurely.
  69. 8 Administration
  70. 9 Application for order.
  71. 10 Effect of application.
  72. 11 Effect of order.
  73. 12 Notification of order.
  74. 13 Appointment of administrator.
  75. 14 General powers.
  76. 15 Power to deal with charged property, etc.
  77. 16 Operation of s. 15 in Scotland.
  78. 17 General duties.
  79. 18 Discharge or variation of administration order.
  80. 19 Vacation of office.
  81. 20 Release of administrator.
  82. 21 Information to be given by administrator.
  83. 22 Statement of affairs to be submitted to administrator.
  84. 23 Statement of proposals.
  85. 24 Consideration of proposals by creditors’ meeting.
  86. 25 Approval of substantial revisions.
  87. 26 Creditors’ committee.
  88. 27 Protection of interests of creditors and members.
  89. 28 Extent of this Chapter.
  90. 29 Definitions.
  91. 30 Disqualification of body corporate from acting as receiver.
  92. 31 Disqualification of bankrupt or person in respect of whom a debt relief order is made
  93. 32 Power for court to appoint official receiver.
  94. 33 Time from which appointment is effective.
  95. 34 Liability for invalid appointment.
  96. 35 Application to court for directions.
  97. 36 Court’s power to fix remuneration.
  98. 37 Liability for contracts, etc.
  99. 38 Receivership accounts to be delivered to registrar.
  100. 39 Notification that receiver or manager appointed.
  101. 40 Payment of debts out of assets subject to floating charge.
  102. 41 Enforcement of duty to make returns.
  103. 42 General powers.
  104. 43 Power to dispose of charged property, etc.
  105. 44 Agency and liability for contracts.
  106. 45 Vacation of office.
  107. 46 Information to be given by administrative receiver.
  108. 47 Statement of affairs to be submitted.
  109. 48 Report by administrative receiver.
  110. 49 Committee of creditors.
  111. 50 Extent of this Chapter.
  112. 51 Power to appoint receiver.
  113. 52 Circumstances justifying appointment.
  114. 53 Mode of appointment by holder of charge.
  115. 54 Appointment by court.
  116. 55 Powers of receiver.
  117. 56 Precedence among receivers.
  118. 57 Agency and liability of receiver for contracts.
  119. 58 Remuneration of receiver.
  120. 59 Priority of debts.
  121. 60 Distribution of moneys.
  122. 61 Disposal of interest in property.
  123. 62 Cessation of appointment of receiver.
  124. 63 Powers of court.
  125. 64 Notification that receiver appointed.
  126. 65 Information to be given by receiver.
  127. 66 Company’s statement of affairs.
  128. 67 Report by receiver.
  129. 68 Committee of creditors
  130. 69 Enforcement of receiver’s duty to make returns, etc.
  131. 70 Interpretation for Chapter II.
  132. 71 Prescription of forms, etc.; regulations.
  133. 72 Cross-border operation of receivership provisions.
  134. 72A Floating charge holder not to appoint administrative receiver
  135. 72B First exception: capital market
  136. 72C Second exception: public-private partnership
  137. 72D Third exception: utilities
  138. 72DA Exception in respect of urban regeneration projects
  139. 72E Fourth exception: project finance
  140. 72F Fifth exception: financial market
  141. 72G Sixth exception: social landlords
  142. 72GA Exception in relation to protected railway companies etc.
  143. 72H Sections 72A to 72G: supplementary
  144. 73 Scheme of this Part
  145. 74 Liability as contributories of present and past members.
  146. 75 Directors, etc. with unlimited liability.
  147. 76 Liability of past directors and shareholders.
  148. 77 Limited company formerly unlimited.
  149. 78 Unlimited company formerly limited.
  150. 79 Meaning of “contributory”.
  151. 80 Nature of contributory’s liability.
  152. 81 Contributories in case of death of a member.
  153. 82 Effect of contributory’s bankruptcy.
  154. 83 Companies registered but not formed under the Companies Act 2006
  155. 84 Circumstances in which company may be wound up voluntarily.
  156. 85 Notice of resolution to wind up.
  157. 86 Commencement of winding up.
  158. 87
  159. 88 Avoidance of share transfers, etc. after winding-up resolution.
  160. 89 Statutory declaration of solvency.
  161. 90 Distinction between “members’” and “creditors’” voluntary winding up.
  162. 91 Appointment of liquidator.
  163. 92 Power to fill vacancy in office of liquidator.
  164. 92A Progress report to company ...
  165. 93 General company meeting at each year’s end (Scotland)
  166. 94 Final account prior to dissolution
  167. 95 Effect of company’s insolvency.
  168. 96 Conversion to creditors’ voluntary winding up.
  169. 97 Application of this Chapter.
  170. 98 Meeting of creditors.
  171. 99 Directors to lay statement of affairs before creditors.
  172. 100 Appointment of liquidator.
  173. 101 Appointment of liquidation committee.
  174. 102 Creditors’ meeting where winding up converted under s. 96.
  175. 103 Cesser of directors’ powers.
  176. 104 Vacancy in office of liquidator.
  177. 104A Progress report to company and creditors ... ...
  178. 105 Meetings of company and creditors at each year’s end (Scotland).
  179. 106 Final account prior to dissolution.
  180. 107 Distribution of company’s property.
  181. 108 Appointment or removal of liquidator by the court.
  182. 109 Notice by liquidator of his appointment.
  183. 110 Acceptance of shares, etc., as consideration for sale of company property.
  184. 111 Dissent from arrangement under s. 110.
  185. 112 Reference of questions to court.
  186. 113 Court’s power to control proceedings (Scotland).
  187. 114 No liquidator appointed or nominated by company.
  188. 115 Expenses of voluntary winding up.
  189. 116 Saving for certain rights.
  190. 117 High Court and county court jurisdiction.
  191. 118 Proceedings taken in wrong court.
  192. 119 Proceedings in county court; case stated for High Court.
  193. 120 Court of Session and sheriff court jurisdiction.
  194. 121 Power to remit winding up to Lord Ordinary.
  195. 122 Circumstances in which company may be wound up by the court.
  196. 123 Definition of inability to pay debts.
  197. 124 Application for winding up.
  198. 124A Petition for winding up on grounds of public interest.
  199. 124B Petition for winding up of SE
  200. 124C Petition for winding up of SCE
  201. 125 Powers of court on hearing of petition.
  202. 126 Power to stay or restrain proceedings against company.
  203. 127 Avoidance of property dispositions, etc.
  204. 128 Avoidance of attachments, etc.
  205. 129 Commencement of winding up by the court.
  206. 130 Consequences of winding-up order.
  207. 131 Company’s statement of affairs.
  208. 132 Investigation by official receiver.
  209. 133 Public examination of officers
  210. 134 Enforcement of s. 133.
  211. 135 Appointment and powers of provisional liquidator.
  212. 136 Functions of official receiver in relation to office of liquidator.
  213. 137 Appointment by Secretary of State.
  214. 138 Appointment of liquidator in Scotland.
  215. 139 Choice of liquidator by creditors and contributories.
  216. 140 Appointment by the court following administration or voluntary arrangement.
  217. 141 Liquidation committee (England and Wales).
  218. 142 Liquidation committee (Scotland).
  219. 143 General functions in winding up by the court.
  220. 144 Custody of company’s property.
  221. 145 Vesting of company property in liquidator.
  222. 146 Final account
  223. 146A Official receiver’s duty to send statement to registrar about other proceedings
  224. 147 Power to stay or sist winding up.
  225. 148 Settlement of list of contributories and application of assets.
  226. 149 Debts due from contributory to company.
  227. 150 Power to make calls.
  228. 151 Payment into bank of money due to company.
  229. 152 Order on contributory to be conclusive evidence.
  230. 153 Power to exclude creditors not proving in time.
  231. 154 Adjustment of rights of contributories.
  232. 155 Inspection of books by creditors, etc.
  233. 156 Payment of expenses of winding up.
  234. 157 Attendance at company meetings (Scotland).
  235. 158 Power to arrest absconding contributory.
  236. 159 Powers of court to be cumulative.
  237. 160 Delegation of powers to liquidator (England and Wales).
  238. 161 Orders for calls on contributories (Scotland).
  239. 162 Appeals from orders in Scotland.
  240. 163 Style and title of liquidators.
  241. 164 Corrupt inducement affecting appointment.
  242. 165 Voluntary winding up.
  243. 166 Creditors’ voluntary winding up.
  244. 167 Winding up by the court.
  245. 168 Supplementary powers (England and Wales).
  246. 169 Supplementary powers (Scotland).
  247. 170 Enforcement of liquidator’s duty to make returns, etc.
  248. 171 Removal, etc. (voluntary winding up).
  249. 172 Removal, etc. (winding up by the court).
  250. 173 Release (voluntary winding up).
  251. 174 Release (winding up by the court).
  252. 174A Moratorium debts etc: priority
  253. 175 Preferential debts (general provision).
  254. 176 Preferential charge on goods distrained , etc.
  255. 176AZA Non-preferential debts of financial institutions
  256. 176ZA Payment of expenses of winding up (England and Wales)
  257. 176ZB Application of proceeds of office-holder claims
  258. 176A Share of assets for unsecured creditors
  259. 177 Power to appoint special manager.
  260. 178 Power to disclaim onerous property.
  261. 179 Disclaimer of leaseholds.
  262. 180 Land subject to rentcharge.
  263. 181 Powers of court (general).
  264. 182 Powers of court (leaseholds).
  265. 183 Effect of execution or attachment (England and Wales).
  266. 184 Duties of officers charged with execution of writs and other processes (England and Wales).
  267. 185 Effect of diligence (Scotland)
  268. 186 Rescission of contracts by the court.
  269. 187 Power to make over assets to employees.
  270. 188 Notification that company is in liquidation.
  271. 189 Interest on debts.
  272. 190 Documents exempt from stamp duty.
  273. 191 Company’s books to be evidence.
  274. 192 Information as to pending liquidations.
  275. 193 Unclaimed dividends (Scotland).
  276. 194 Resolutions passed at adjourned meetings.
  277. 195 Court's powers to ascertain wishes of creditors or contributories.
  278. 196 Judicial notice of court documents.
  279. 197 Commission for receiving evidence.
  280. 198 Court order for examination of persons in Scotland.
  281. 199 Costs of application for leave to proceed (Scottish companies).
  282. 200 Affidavits etc. in United Kingdom and overseas.
  283. 201 Dissolution (voluntary winding up).
  284. 202 Early dissolution (England and Wales).
  285. 203 Consequence of notice under s. 202.
  286. 204 Early dissolution (Scotland).
  287. 205 Dissolution otherwise than under ss. 202-204.
  288. 206 Fraud, etc. in anticipation of winding up.
  289. 207 Transactions in fraud of creditors.
  290. 208 Misconduct in course of winding up.
  291. 209 Falsification of company’s books.
  292. 210 Material omissions from statement relating to company’s affairs.
  293. 211 False representations to creditors.
  294. 212 Summary remedy against delinquent directors, liquidators, etc.
  295. 213 Fraudulent trading.
  296. 214 Wrongful trading.
  297. 215 Proceedings under ss. 213, 214.
  298. 216 Restriction on re-use of company names.
  299. 217 Personal liability for debts, following contravention of s. 216.
  300. 218 Prosecution of delinquent officers and members of company.
  301. 219 Obligations arising under s. 218.
  302. 220 Meaning of “unregistered company”.
  303. 221 Winding up of unregistered companies.
  304. 222 Inability to pay debts: unpaid creditor for £750 or more.
  305. 223 Inability to pay debts: debt remaining unsatisfed after action brought.
  306. 224 Inability to pay debts: other cases.
  307. 225 Company incorporated outside Great Britain may be wound up though dissolved.
  308. 226 Contributories in winding up of unregistered company.
  309. 227 Power of court to stay, sist or restrain proceedings.
  310. 228 Actions stayed on winding-up order.
  311. 229 Provisions of this Part to be cumulative.
  312. 230 Holders of office to be qualified insolvency practitioners.
  313. 231 Appointment to office of two or more persons.
  314. 232 Validity of office-holder’s acts.
  315. 233 Supplies of gas, water, electricity, etc.
  316. 233A Further protection of essential supplies
  317. 233B Protection of supplies of goods and services
  318. 233C Powers to amend section 233B and Schedule 4ZZA
  319. 234 Getting in the company’s property.
  320. 235 Duty to co-operate with office-holder.
  321. 236 Inquiry into company’s dealings, etc.
  322. 237 Court’s enforcement powers under s. 236.
  323. 238 Transactions at an undervalue (England and Wales).
  324. 239 Preferences (England and Wales).
  325. 240 “Relevant time” under ss. 238, 239.
  326. 241 Orders under ss. 238, 239.
  327. 242 Gratuitous alienations (Scotland).
  328. 243 Unfair preferences (Scotland).
  329. 244 Extortionate credit transactions.
  330. 245 Avoidance of certain floating charges.
  331. 246 Unenforceability of liens on books, etc.
  332. 246ZA Fraudulent trading: administration
  333. 246ZB Wrongful trading: administration
  334. 246ZC Proceedings under section 246ZA or 246ZB
  335. 246ZD Power to assign
  336. 246ZE Decisions by creditors and contributories: general
  337. 246ZF Deemed consent procedure
  338. 246ZG Power to amend sections 246ZE and 246ZF
  339. 246A Remote attendance at meetings
  340. 246B Use of websites
  341. 246C Creditors' ability to opt out of receiving certain notices
  342. 247 “Insolvency” and “go into liquidation”.
  343. 248 “Secured creditor”, etc.
  344. 248A “Opted-out creditor”
  345. 249 “Connected” with a company.
  346. 250 “Member” of a company.
  347. 251 Expressions used generally.
  348. 251A Debt relief orders
  349. 251B Making of application
  350. 251C Duty of official receiver to consider and determine application
  351. 251D Presumptions applicable to the determination of an application
  352. 251E Making of debt relief orders
  353. 251F Effect of debt relief order on other debt management arrangements
  354. 251G Moratorium from qualifying debts
  355. 251H The moratorium period
  356. 251I Discharge from qualifying debts
  357. 251J Providing assistance to official receiver etc
  358. 251K Objections and investigations
  359. 251L Power of official receiver to revoke or amend a debt relief order
  360. 251M Powers of court in relation to debt relief orders
  361. 251N Inquiry into debtor's dealings and property
  362. 251O False representations and omissions
  363. 251P Concealment or falsification of documents
  364. 251Q Fraudulent disposal of property
  365. 251R Fraudulent dealing with property obtained on credit
  366. 251S Obtaining credit or engaging in business
  367. 251T Offences: supplementary
  368. 251U Approved intermediaries
  369. 251V Debt relief restrictions orders and undertakings
  370. 251W Register of debt relief orders etc
  371. 251X Interpretation
  372. 252 Interim order of court.
  373. 253 Application for interim order.
  374. 254 Effect of application.
  375. 255 Cases in which interim order can be made.
  376. 256 Nominee’s report on debtor’s proposal.
  377. 256A Debtor’s proposal and nominee’s report.
  378. 257 Consideration of debtor's proposal by creditors
  379. 258 Approval of debtor's proposal
  380. 259 Report of decisions to court.
  381. 260 Effect of approval.
  382. 261 Additional effect on undischarged bankrupt
  383. 262 Challenge of creditors' decision.
  384. 262A False representations etc.
  385. 262B Prosecution of delinquent debtors.
  386. 262C Arrangements coming to an end prematurely.
  387. 263 Implementation and supervision of approved voluntary arrangement.
  388. 263A Availability
  389. 263B Decision
  390. 263C Result
  391. 263D Approval of voluntary arrangement
  392. 263E Implementation
  393. 263F Revocation
  394. 263G Offences
  395. 263H Bankruptcy applications to an adjudicator
  396. 263I Debtors against whom an adjudicator may make a bankruptcy order
  397. 263J Conditions applying to bankruptcy application
  398. 263K Determination of bankruptcy application
  399. 263L Adjudicator's requests for further information
  400. 263M Making of bankruptcy order
  401. 263N Refusal to make a bankruptcy order: review and appeal etc.
  402. 263O False representations and omissions
  403. 264 Who may present a bankruptcy petition.
  404. 265 Creditor's petition: debtors against whom the court may make a bankruptcy order.
  405. 266 Other preliminary conditions.
  406. 267 Grounds of creditor’s petition.
  407. 268 Definition of “inability to pay”, etc.; the statutory demand.
  408. 269 Creditor with security.
  409. 270 Expedited petition.
  410. 271 Proceedings on creditor’s petition.
  411. 272 Grounds of debtor’s petition.
  412. 273 Appointment of insolvency practitioner by the court.
  413. 274 Action on report of insolvency practitioner.
  414. 274A Debtor who meets conditions for a debt relief order
  415. 275 Summary administration.
  416. 276 Default in connection with voluntary arrangement.
  417. 277 Petition based on criminal bankruptcy order.
  418. 278 Commencement and continuance.
  419. 279 Duration
  420. 280 Discharge by order of the court.
  421. 281 Effect of discharge.
  422. 281A Post-discharge restrictions
  423. 282 Court’s power to annul bankruptcy order.
  424. 283 Definition of bankrupt’s estate.
  425. 283A Bankrupt’s home ceasing to form part of estate
  426. 284 Restrictions on dispositions of property.
  427. 285 Restriction on proceedings and remedies.
  428. 286 Power to appoint interim receiver.
  429. 287 Powers of interim receiver.
  430. 288 Statement of affairs.
  431. 289 Investigatory duties of official receiver
  432. 290 Public examination of bankrupt.
  433. 291 Duties of bankrupt in relation to official receiver.
  434. 291A First trustee in bankruptcy
  435. 292 Appointment of trustees: general provision
  436. 293 Summoning of meeting to appoint first trustee.
  437. 294 Power of creditors to requisition meeting.
  438. 295 Failure of meeting to appoint trustee.
  439. 296 Appointment of trustee by Secretary of State.
  440. 297 Special cases.
  441. 298 Removal of trustee; vacation of office.
  442. 299 Release of trustee.
  443. 300 Vacancy in office as trustee.
  444. 301 Creditors’ committee.
  445. 302 Exercise by Secretary of State of functions of creditors’ committee.
  446. 303 General control of trustee by the court.
  447. 304 Liability of trustee.
  448. 305 General functions of trustee.
  449. 306 Vesting of bankrupt’s estate in trustee.
  450. 306A Property subject to restraint order
  451. 306AA Property released from detention
  452. 306B Property in respect of which receivership or administration order made
  453. 306BA Property in respect of which realisation order made
  454. 306C Property subject to certain orders where confiscation order discharged or quashed
  455. 307 After-acquired property.
  456. 308 Vesting in trustee of certain items of excess value.
  457. 308A Vesting in trustee of certain tenancies.
  458. 309 Time-limit for notice under s. 307 or 308.
  459. 310 Income payments orders.
  460. 310A Income payments agreement
  461. 311 Acquisition by trustee of control.
  462. 312 Obligation to surrender control to trustee.
  463. 313 Charge on bankrupt’s home.
  464. 313A Low value home: application for sale, possession or charge
  465. 314 Powers of trustee.
  466. 315 Disclaimer (general power).
  467. 316 Notice requiring trustee’s decision.
  468. 317 Disclaimer of leaseholds.
  469. 318 Disclaimer of dwelling house.
  470. 319 Disclaimer of land subject to rentcharge.
  471. 320 Court order vesting disclaimed property.
  472. 321 Order under s. 320 in respect of leaseholds.
  473. 322 Proof of debts.
  474. 323 Mutual credit and set-off.
  475. 324 Distribution by means of dividend.
  476. 325 Claims by unsatisfied creditors.
  477. 326 Distribution of property in specie.
  478. 327 Distribution in criminal bankruptcy.
  479. 328 Priority of debts.
  480. 329 Debts to spouse.
  481. 330 Final distribution.
  482. 331 Final report.
  483. 332 Saving for bankrupt’s home.
  484. 333 Duties of bankrupt in relation to trustee.
  485. 334 Stay of distribution in case of second bankruptcy.
  486. 335 Adjustment between earlier and later bankruptcy estates.
  487. 335A Rights under trusts of land.
  488. 336 Rights of occupation etc. of bankrupt’s spouse or civil partner.
  489. 337 Rights of occupation of bankrupt.
  490. 338 Payments in respect of premises occupied by bankrupt.
  491. 339 Transactions at an undervalue.
  492. 340 Preferences.
  493. 341 “Relevant time” under ss. 339, 340.
  494. 342 Orders under ss. 339, 340.
  495. 342A Recovery of excessive pension contributions.
  496. 342B Orders under section 342A.
  497. 342C Orders under section 342A: supplementary.
  498. 342D Recovery of excessive contributions in pension-sharing cases.
  499. 342E Orders under section 339 or 340 in respect of pension-sharing transactions.
  500. 342F Orders under section 339 or 340 in pension-sharing cases: supplementary.
  501. 343 Extortionate credit transactions.
  502. 344 Avoidance of general assignment of book debts.
  503. 345 Contracts to which bankrupt is a party.
  504. 346 Enforcement procedures.
  505. 347 Distress, etc.
  506. 348 Apprenticeships, etc.
  507. 349 Unenforceability of liens on books, etc.
  508. 349A Arbitration agreements to which bankrupt is party.
  509. 350 Scheme of this Chapter.
  510. 351 Definitions.
  511. 352 Defence of innocent intention.
  512. 353 Non-disclosure.
  513. 354 Concealment of property.
  514. 355 Concealment of books and papers; falsification.
  515. 356 False statements.
  516. 357 Fraudulent disposal of property.
  517. 358 Absconding.
  518. 359 Fraudulent dealing with property obtained on credit.
  519. 360 Obtaining credit; engaging in business.
  520. 361 Failure to keep proper accounts of business.
  521. 362 Gambling.
  522. 363 General control of court.
  523. 364 Power of arrest.
  524. 365 Seizure of bankrupt’s property.
  525. 366 Inquiry into bankrupt’s dealings and property.
  526. 367 Court’s enforcement powers under s. 366.
  527. 368 Provision corresponding to s. 366, where interim receiver appointed.
  528. 369 Order for production of documents by inland revenue.
  529. 370 Power to appoint special manager.
  530. 371 Re-direction of bankrupt’s letters, etc.
  531. 372 Supplies of gas, water, electricity, etc.
  532. 372A Further protection of essential supplies
  533. 373 Jurisdiction in relation to insolvent individuals.
  534. 374 Insolvency districts.
  535. 375 Appeals etc. from courts exercising insolvency jurisdiction.
  536. 376 Time-limits.
  537. 377 Formal defects.
  538. 378 Exemption from stamp duty.
  539. 379 Annual report.
  540. 379ZA Creditors' decisions: general
  541. 379ZB Deemed consent procedure
  542. 379ZC Power to amend sections 379ZA and 379ZB
  543. 379A Remote attendance at meetings
  544. 379B Use of websites
  545. 379C Creditors' ability to opt out of receiving certain notices
  546. 380 Introductory.
  547. 381 “Bankrupt” and associated terminology.
  548. 382 “Bankruptcy debt” , “liability”
  549. 383 “Creditor”, “security”, etc.
  550. 383A “Opted-out creditor”
  551. 384 “Prescribed” and “the rules”.
  552. 385 Miscellaneous definitions.
  553. 386 Categories of preferential debts.
  554. 387 “The relevant date”.
  555. 387A Financial institutions and their non-preferential debts
  556. 388 Meaning of “act as insolvency practitioner”
  557. 389 Acting without qualification an offence.
  558. 389A Authorisation of nominees and supervisors.
  559. 389B Official receiver as nominee or supervisor
  560. 390 Persons not qualified to act as insolvency practitioners.
  561. 390A Authorisation
  562. 390B Partial authorisation: acting in relation to partnerships
  563. 391 Recognised professional bodies
  564. 391A Application for recognition as recognised professional body
  565. 391B Application of regulatory objectives
  566. 391C Meaning of “regulatory functions” and “regulatory objectives”
  567. 391D Directions
  568. 391E Directions: procedure
  569. 391F Financial penalty
  570. 391G Financial penalty: procedure
  571. 391H Appeal against financial penalty
  572. 391I Recovery of financial penalties
  573. 391J Reprimand
  574. 391K Reprimand: procedure
  575. 391L Revocation of recognition at instigation of Secretary of State
  576. 391M Orders under section 391L: procedure
  577. 391N Revocation of recognition at request of body
  578. 391O Direct sanctions orders
  579. 391P Application for, and power to make, direct sanctions order
  580. 391Q Direct sanctions order: conditions
  581. 391R Direct sanctions direction instead of order
  582. 391S Power for Secretary of State to obtain information
  583. 391T Compliance orders
  584. 398A Appointment etc of adjudicators and assistants
  585. 399 Appointment, etc. of official receivers.
  586. 400 Functions and status of official receivers.
  587. 401 Deputy official receivers and staff.
  588. 402 Official Petitioner.
  589. 403 Insolvency Services Account.
  590. 404 Investment Account.
  591. 405 Application of income in Investment Account; adjustment of balances.
  592. 406 Interest on money received by liquidators or trustees in bankruptcy and invested.
  593. 407 Unclaimed dividends and undistributed balances.
  594. 408 Adjustment of balances
  595. 409 Annual financial statement and audit.
  596. 410 Extent of this Part.
  597. 411 Company insolvency rules.
  598. 412 Individual insolvency rules (England and Wales).
  599. 413 Insolvency Rules Committee.
  600. 414 Fees orders (company insolvency proceedings).
  601. 415 Fees orders (individual insolvency proceedings in England and Wales).
  602. 415A Fees orders (general)
  603. 415B Monetary limits (company moratorium)
  604. 416 Monetary limits (companies winding up).
  605. 417 Money sum in s. 222.
  606. 417A Money sums (company moratorium).
  607. 418 Monetary limits (bankruptcy).
  608. 419 Regulations for purposes of Part XIII.
  609. 420 Insolvent partnerships.
  610. 421 Insolvent estates of deceased persons.
  611. 421A Insolvent estates: joint tenancies.
  612. 422 Formerly authorised banks.
  613. 422A Meaning of “relevant offence”
  614. 423 Transactions defrauding creditors.
  615. 424 Those who may apply for an order under s. 423.
  616. 425 Provision which may be made by order under s. 423.
  617. 426 Co-operation between courts exercising jurisdiction in relation to insolvency.
  618. 426A Disqualification from Parliament (England and Wales and Northern Ireland)
  619. 426B Devolution
  620. 426C Irrelevance of privilege
  621. 427 Disqualification from Parliament (Scotland ...)
  622. 428 Exemptions from Restrictive Trade Practices Act.
  623. 429 Disabilities on revocation of administration order against an individual.
  624. 430 Provision introducing Schedule of punishments.
  625. 431 Summary proceedings.
  626. 432 Offences by bodies corporate.
  627. 433 Admissibility in evidence of statements of affairs, etc.
  628. 434 Crown application.
  629. 434A Introductory
  630. 434B Representation of corporations in decision procedures and at meetings
  631. 434C Legal professional privilege
  632. 434D Enforcement of company's filing obligations
  633. 434E Application of filing obligations to overseas companies
  634. 435 Meaning of “associate”.
  635. 436 Expressions used generally.
  636. 436A Proceedings under EU Regulations: modified definition of property
  637. 436B References to things in writing
  638. 437 Transitional provisions, and savings.
  639. 438 Repeals.
  640. 439 Amendment of enactments.
  641. 440 Extent (Scotland).
  642. 441 Extent (Northern Ireland).
  643. 442 Extent (other territories).
  644. 443 Commencement.
  645. 444 Citation.
  646. SCHEDULE ZA1 Moratorium: Eligible companies
  647. SCHEDULE ZA2 Moratorium: contract or other instrument involving financial services
  648. SCHEDULE B1 ADMINISTRATION
  649. SCHEDULE 1 Powers of Administrator or Administrative Receiver
  650. SCHEDULE 2 Powers of a Scottish Receiver (Additional to Those Conferred on him by the Instrument of Charge)
  651. SCHEDULE 2A EXCEPTIONS TO PROHIBITION ON APPOINTMENT OF ADMINISTRATIVE RECEIVER: SUPPLEMENTARY PROVISIONS
  652. SCHEDULE 3 Orders in Course of Winding Up Pronounced in Vacation (Scotland)
  653. SCHEDULE 4 Powers of Liquidator in a Winding Up
  654. SCHEDULE 4ZZA Protection of supplies under section 233B: exclusions
  655. SCHEDULE 4ZA Conditions for making a debt relief order
  656. SCHEDULE 4ZB Debt relief restrictions orders and undertakings
  657. SCHEDULE 4A
  658. SCHEDULE 5 Powers of Trustee in Bankruptcy
  659. SCHEDULE 6 The Categories of Preferential Debts
  660. SCHEDULE 8 Provisions Capable of Inclusion in Company Insolvency Rules
  661. SCHEDULE 9 Provisions Capable of Inclusion in Individual Insolvency Rules
  662. SCHEDULE 10 Punishment of Offences under this Act
  663. SCHEDULE 11 Transitional Provisions and Savings
  664. SCHEDULE 12 Enactments Repealed
  665. SCHEDULE 13 Consequential Amendments of Companies Act 1985
  666. SCHEDULE 14 Consequential Amendments of other Enactments

Proposed changes to this act

No one has proposed a change to this act yet.

666 provisions

20 Release of administrator.

(1) A person who has ceased to be the administrator of a company has his release with effect from the following time, that is to say— (a) in the case of a person who has died, the time at which notice is given to the court in accordance with the rules that he has ceased to hold office; (b) in any other case, such time as the court may determine. (2) Where a person has his release under this section, he is, with effect from the time specified above, discharged from all liability both in respect of acts or omissions of his in the administration and otherwise in relation to his conduct as administrator. (3) However, nothing in this section prevents the exercise, in relation to a person who has had his release as above, of the court’s powers under section 212 in Chapter X of Part IV (summary remedy against delinquent directors, liquidators, etc.).

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21 Information to be given by administrator.

(1) Where an administration order has been made, the administrator shall— (a) forthwith send to the company and publish in the prescribed manner a notice of the order, and (b) within 28 days after the making of the order, unless the court otherwise directs, send such a notice to all creditors of the company (so far as he is aware of their addresses). (2) Where an administration order has been made, the administrator shall also, within 14 days after the making of the order, send an office copy of the order to the registrar of companies and to such other persons as may be prescribed. (3) If the administrator without reasonable excuse fails to comply with this section, he is liable to a fine and, for continued contravention, to a daily default fine.

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22 Statement of affairs to be submitted to administrator.

(1) Where an administration order has been made, the administrator shall forthwith require some or all of the persons mentioned below to make out and submit to him a statement in the prescribed form as to the affairs of the company. (2) The statement shall be verified by affidavit by the persons required to submit it and shall show— (a) particulars of the company’s assets, debts and liabilities; (b) the names and addresses of its creditors; (c) the securities held by them respectively; (d) the dates when the securities were respectively given; and (e) such further or other information as may be prescribed. (3) The persons referred to in subsection (1) are— (a) those who are or have been officers of the company; (b) those who have taken part in the company’s formation at any time within one year before the date of the administration order; (c) those who are in the company’s employment or have been in its employment within that year, and are in the administrator’s opinion capable of giving the information required; (d) those who are or have been within that year officers of or in the employment of a company which is, or within that year was, an officer of the company. In this subsection “employment” includes employment under a contract for services. (4) Where any persons are required under this section to submit a statement of affairs to the administrator, they shall do so (subject to the next subsection) before the end of the period of 21 days beginning with the day after that on which the prescribed notice of the requirement is given to them by the administrator. (5) The administrator, if he thinks fit, may— (a) at any time release a person from an obligation imposed on him under subsection (1) or (2), or (b) either when giving notice under subsection (4) or subsequently, extend the period so mentioned; and where the administrator has refused to exercise a power conferred by this subsection, the court, if it thinks fit, may exercise it. (6) If a person without reasonable excuse fails to comply with any obligation imposed under this section, he is liable to a fine and, for continued contravention, to a daily default fine.

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23 Statement of proposals.

(1) Where an administration order has been made, the administrator shall, within 3 months (or such longer period as the court may allow) after the making of the order— (a) send to the registrar of companies and (so far as he is aware of their addresses) to all creditors a statement of his proposals for achieving the purpose or purposes specified in the order, and (b) lay a copy of the statement before a meeting of the company’s creditors summoned for the purpose on not less than 14 days’ notice. (2) The administrator shall also, within 3 months (or such longer period as the court may allow) after the making of the order, either— (a) send a copy of the statement (so far as he is aware of their addresses) to all members of the company, or (b) publish in the prescribed manner a notice stating an address to which members of the company should write for copies of the statement to be sent to them free of charge. (3) If the administrator without reasonable excuse fails to comply with this section, he is liable to a fine and, for continued contravention, to a daily default fine.

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24 Consideration of proposals by creditors’ meeting.

(1) A meeting of creditors summoned under section 23 shall decide whether to approve the administrator’s proposals. (2) The meeting may approve the proposals with modifications, but shall not do so unless the administrator consents to each modification. (3) Subject as above, the meeting shall be conducted in accordance with the rules. (4) After the conclusion of the meeting in accordance with the rules, the administrator shall report the result of the meeting to the court and shall give notice of that result to the registrar of companies and to such persons as may be prescribed. (5) If a report is given to the court under subsection (4) that the meeting has declined to approve the administrator’s proposals (with or without modifications), the court may by order discharge the administration order and make such consequential provision as it thinks fit, or adjourn the hearing conditionally or unconditionally, or make an interim order or any other order that it thinks fit. (6) Where the administration order is discharged, the administrator shall, within 14 days after the making of the order effecting the discharge, send an office copy of that order to the registrar of companies. (7) If the administrator without reasonable excuse fails to comply with subsection (6), he is liable to a fine and, for continued contravention, to a daily default fine.

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25 Approval of substantial revisions.

(1) This section applies where— (a) proposals have been approved (with or without modifications) under section 24, and (b) the administrator proposes to make revisions of those proposals which appear to him substantial. (2) The administrator shall— (a) send to all creditors of the company (so far as he is aware of their addresses) a statement in the prescribed form of his proposed revisions, and (b) lay a copy of the statement before a meeting of the company’s creditors summoned for the purpose on not less than 14 days’ notice; and he shall not make the proposed revisions unless they are approved by the meeting. (3) The administrator shall also either— (a) send a copy of the statement (so far as he is aware of their addresses) to all members of the company, or (b) publish in the prescribed manner a notice stating an address to which members of the company should write for copies of the statement to be sent to them free of charge. (4) The meeting of creditors may approve the proposed revisions with modifications, but shall not do so unless the administrator consents to each modification. (5) Subject as above, the meeting shall be conducted in accordance with the rules. (6) After the conclusion of the meeting in accordance with the rules, the administrator shall give notice of the result of the meeting to the registrar of companies and to such persons as may be prescribed.

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26 Creditors’ committee.

(1) Where a meeting of creditors summoned under section 23 has approved the administrator’s proposals (with or without modifications), the meeting may, if it thinks fit, establish a committee (“the creditors’ committee”) to exercise the functions conferred on it by or under this Act. (2) If such a committee is established, the committee may, on giving not less than 7 days’ notice, require the administrator to attend before it at any reasonable time and furnish it with such information relating to the carrying out of his functions as it may reasonably require.

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27 Protection of interests of creditors and members.

(1) At any time when an administration order is in force, a creditor or member of the company may apply to the court by petition for an order under this section on the ground— (a) that the company’s affairs, business and property are being or have been managed by the administrator in a manner which is unfairly prejudicial to the interests of its creditors or members generally, or of some part of its creditors or members (including at least himself), or (b) that any actual or proposed act or omission of the administrator is or would be so prejudicial. (2) On an application for an order under this section the court may, subject as follows, make such order as it thinks fit for giving relief in respect of the matters complained of, or adjourn the hearing conditionally or unconditionally, or make an interim order or any other order that it thinks fit. (3) An order under this section shall not prejudice or prevent— (a) the implementation of a voluntary arrangement approved under . . . Part I, or any compromise or arrangement sanctioned under section 425 of the Companies Act; or (b) where the application for the order was made more than 28 days after the approval of any proposals or revised proposals under section 24 or 25, the implementation of those proposals or revised proposals (4) Subject as above, an order under this section may in particular— (a) regulate the future management by the administrator of the company’s affairs, business and property; (b) require the administrator to refrain from doing or continuing an act complained of by the petitioner, or to do an act which the petitioner has complained he has omitted to do. (c) require the summoning of a meeting of creditors or members for the purpose of considering such matters as the court may direct; (d) discharge the administration order and make such consequential provision as the court thinks fit. (5) Nothing in section 15 or 16 is to be taken as prejudicing applications to the court under this section. (6) Where the administration order is discharged, the administrator shall, within 14 days after the making of the order effecting the discharge, send an office copy of that order to the registrar of companies; and if without reasonable excuse he fails to comply with this subsection, he is liable to a fine and, for continued contravention, to a daily default fine.

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28 Extent of this Chapter.

(1) In this Chapter “company” means a company registered under the Companies Act 2006 in England and Wales or Scotland. (2) This Chapter does not apply to receivers appointed under Chapter 2 of this Part (Scotland).

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29 Definitions.

(1) It is hereby declared that, except where the context otherwise requires— (a) any reference in . . . this Act to a receiver or manager of the property of a company, or to a receiver of it, includes a receiver or manager, or (as the case may be) a receiver of part only of that property and a receiver only of the income arising from the property or from part of it; and (b) any reference in . . . this Act to the appointment of a receiver or manager under powers contained in an instrument includes an appointment made under powers which, by virtue of any enactment, are implied in and have effect as if contained in an instrument. (2) In this Chapter “administrative receiver” means— (a) a receiver or manager of the whole (or substantially the whole) of a company’s property appointed by or on behalf of the holders of any debentures of the company secured by a charge which, as created, was a floating charge, or by such a charge and one or more other securities; or (b) a person who would be such a receiver or manager but for the appointment of some other person as the receiver of part of the company’s property.

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30 Disqualification of body corporate from acting as receiver.

A body corporate is not qualified for appointment as receiver of the property of a company, and any body corporate which acts as such a receiver is liable to a fine.

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31 Disqualification of bankrupt or person in respect of whom a debt relief order is made

(1) A person commits an offence if he acts as receiver or manager of the property of a company on behalf of debenture holders while— (a) he is an undischarged bankrupt, (aa) a moratorium period under a debt relief order applies in relation to him, or (b) a bankruptcy restrictions order or a debt relief restrictions order is in force in respect of him. (2) A person guilty of an offence under subsection (1) shall be liable to imprisonment, a fine or both. (3) This section does not apply to a receiver or manager acting under an appointment made by the court.

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32 Power for court to appoint official receiver.

Where application is made to the court to appoint a receiver on behalf of the debenture holders or other creditors of a company which is being wound up by the court, the official receiver may be appointed.

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33 Time from which appointment is effective.

(1) The appointment of a person as a receiver or manager of a company’s property under powers contained in an instrument— (a) is of no effect unless it is accepted by that person before the end of the business day next following that on which the instrument of appointment is received by him or on his behalf, and (b) subject to this, is deemed to be made at the time at which the instrument of appointment is so received. (2) This section applies to the appointment of two or more persons as joint receivers or managers of a company’s property under powers contained in an instrument, subject to such modifications as may be prescribed by the rules.

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34 Liability for invalid appointment.

Where the appointment of a person as the receiver or manager of a company’s property under powers contained in an instrument is discovered to be invalid (whether by virtue of the invalidity of the instrument or otherwise), the court may order the person by whom or on whose behalf the appointment was made to indemnify the person appointed against any liability which arises solely by reason of the invalidity of the appointment.

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35 Application to court for directions.

(1) A receiver or manager of the property of a company appointed under powers contained in an instrument, or the persons by whom or on whose behalf a receiver or manager has been so appointed, may apply to the court for directions in relation to any particular matter arising in connection with the performance of the functions of the receiver or manager. (2) On such an application, the court may give such directions, or may make such order declaring the rights of persons before the court or otherwise, as it thinks just.

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36 Court’s power to fix remuneration.

(1) The court may, on an application made by the liquidator of a company, by order fix the amount to be paid by way of remuneration to a person who, under powers contained in an instrument, has been appointed receiver or manager of the company’s property. (2) The court’s power under subsection (1), where no previous order has been made with respect thereto under the subsection— (a) extends to fixing the remuneration for any period before the making of the order or the application for it, (b) is exercisable notwithstanding that the receiver or manager has died or ceased to act before the making of the order or the application, and (c) where the receiver or manager has been paid or has retained for his remuneration for any period before the making of the order any amount in excess of that so fixed for that period, extends to requiring him or his personal representatives to account for the excess or such part of it as may be specified in the order. But the power conferred by pararaph (c) shall not be exercised as respects any period before the making of the application for the order under this section, unless in the court’s opinion there are special circumstances making it proper for the power to be exercised. (3) The court may from time to time on an application made either by the liquidator or by the receiver or manager, vary or amend an order made under subsection (1).

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37 Liability for contracts, etc.

(1) A receiver or manager appointed under powers contained in an instrument (other than an administrative receiver) is, to the same extent as if he had been appointed by order of the court— (a) personally liable on any contract entered into by him in the performance of his functions (except in so far as the contract otherwise provides) and on any contract of employment adopted by him in the performance of those functions, and (b) entitled in respect of that liability to indemnity out of the assets. (2) For the purposes of subsection (1)(a), the receiver or manager is not to be taken to have adopted a contract of employment by reason of anything done or omitted to be done with 14 days after his appointment. (3) Subsection (1) does not limit any right to indemnity which the receiver or manager would have apart from it, nor limit his liability on contracts entered into without authority, nor confer any right to indemnity in respect of that liability. (4) Where at any time the receiver or manager so appointed vacates office— (a) his remuneration and any expenses properly incurred by him, and (b) any indemnity to which he is entitled out of the assets of the company, shall be charged on and paid out of any property of the company which is in his custody or under his control at that time in priority to any charge or other security held by the person by or on whose behalf he was appointed.

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38 Receivership accounts to be delivered to registrar.

(1) Except in the case of an adminstrative receiver, every receiver or manager of a company’s property who has been appointed under powers contained in an instrument shall deliver to the registrar of companies for registration the requisite accounts of his receipts and payments. (2) The accounts shall be delivered within one month (or such longer period as the registrar may allow) after the expiration of 12 months from the date of his appointment and of every subsequent period of 6 months, and also within one month after he ceases to act as receiver or manager. (3) The requisite accounts shall be an abstract in the prescribed form showing— (a) receipts and payments during the relevant period of 12 or 6 months, or (b) where the receiver or manager ceases to act, receipts and payments during the period from the end of the period of 12 or 6 months to which the last preceding abstract related (or, if no preceding abstract has been delivered under this section, from the date of his appointment) up to the date of his so ceasing, and the aggregate amount of receipts and payments during all preceding periods since his appointment. (4) In this section “prescribed” means prescribed by regulations made by statutory instrument by the Secretary of State. (5) A receiver or manager who makes default in complying with this section is liable to a fine and, for continued contravention, to a daily default fine.

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39 Notification that receiver or manager appointed.

(1) Where a receiver or manager of the property of a company has been appointed— (a) every invoice, order for goods or services, business letter or order form (whether in hard copy, electronic or any other form) issued by or on behalf of the company or the receiver or manager or the liquidator of the company; and (b) all the company's websites, must contain a statement that a receiver or manager has been appointed. (2) If default is made in complying with this section, the company and any of the following persons, who knowingly and wilfully authorises or permits the default, namely, any officer of the company, any liquidator of the company and any receiver or manager, is liable to a fine.

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40 Payment of debts out of assets subject to floating charge.

(1) The following applies in the case of a company, where a receiver is appointed on behalf of the holders of any debentures of the company secured by a charge which, as created, was a floating charge. (2) If the company is not at the time in course of being wound up, its preferential debts (within the meaning given to that expression by section 386 in Part XII) shall be paid out of the assets coming to the hands of the receiver in priority to any claims for principal or interest in respect of the debentures. (3) Payments made under this section shall be recouped, as far as may be, out of the assets of the company available for payment of general creditors.

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41 Enforcement of duty to make returns.

(1) If a receiver or manager of a company’s property— (a) having made default in filing, delivering or making any return, account or other document, or in giving any notice, which a receiver or manager is by law required to file, deliver, make or give, fails to make good the default within 14 days after the service on him of a notice requiring him to do so, or (b) having been appointed under powers contained in an instrument, has, after being required at any time by the liquidator of the company to do so, failed to render proper accounts of his receipts and payments and to vouch them and pay over to the liquidator the amount properly payable to him, the court may, on an application made for the purpose, make an order directing the receiver or manager (as the case may be) to make good the default within such time as may be specified in the order. (2) In the case of the default mentioned in subsection (1)(a), application to the court may be made by any member or creditor of the company or by the registrar of companies; and in the case of the default mentioned in subsection (1)(b), the application shall be made by the liquidator. In either case the court’s order may provide that all costs of and incidental to the application shall be borne by the receiver or manager, as the case may be. (3) Nothing in this section prejudices the operation of any enactment imposing penalties on receivers in respect of any such default as is mentioned in subsection (1).

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42 General powers.

(1) The powers conferred on the administrative receiver of a company by the debentures by virtue of which he was appointed are deemed to include (except in so far as they are inconsistent with any of the provisions of those debentures) the powers specified in Schedule 1 to this Act. (2) In the application of Schedule 1 to the administrative receiver of a company— (a) the words “he” and “him” refer to the administrative receiver, and (b) references to the property of the company are to the property of which he is or, but for the appointment of some other person as the receiver of part of the company’s property, would be the receiver or manager. (3) A person dealing with the administrative receiver in good faith and for value is not concerned to inquire whether the receiver is acting within his powers.

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43 Power to dispose of charged property, etc.

(1) Where, on an application by the administrative receiver, the court is satisfied that the disposal (with or without other assets) of any relevant property which is subject to a security would be likely to promote a more advantageous realisation of the company’s assets than would otherwise be effected, the court may by order authorise the administrative receiver to dispose of the property as if it were not subject to the security. (2) Subsection (1) does not apply in the case of any security held by the person by or on whose behalf the administrative receiver was appointed, or of any security to which a security so held has priority. (3) It shall be a condition of an order under this section that— (a) the net proceeds of the disposal, and (b) where those proceeds are less than such amount as may be determined by the court to be the net amount which would be realised on a sale of the property in the open market by a willing vendor, such sums as may be required to make good the deficiency, shall be applied towards discharging the sums secured by the security. (4) Where a condition imposed in pursuance of subsection (3) relates to two or more securities, that condition shall require the net proceeds of the disposal and, where paragraph (b) of that subsection applies, the sums mentioned in that paragraph to be applied towards discharging the sums secured by those securities in the order of their priorities. (5) A copy of an order under this section shall, within 14 days of the making of the order, be sent by the administrative receiver to the registrar of companies. (6) If the administrative receiver without reasonable excuse fails to comply with subsection (5), he is liable to a fine and, for continued contravention, to a daily default fine. (7) In this section “relevant property”, in relation to the administrative receiver, means the property of which he is or, but for the appointment of some other person as the receiver of part of the company’s property, would be the receiver or manager.

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44 Agency and liability for contracts.

(1) The administrative receiver of a company— (a) is deemed to be the company’s agent, unless and until the company goes into liquidation; (b) is personally liable on any contract entered into by him in the carrying out of his functions (except in so far as the contract otherwise provides) and , to the extent of any qualifying liability,on any contract of employment adopted by him in the carrying out of those functions; and (c) is entitled in respect of that liability to an indemnity out of the assets of the company. (2) For the purposes of subsection (1)(b) the administrative receiver is not to be taken to have adopted a contract of employment by reason of anything done or omitted to be done within 14 days after his appointment. (2A) For the purposes of subsection (1)(b), a liability under a contract of employment is a qualifying liability if— (a) it is a liability to pay a sum by way of wages or salary or contribution to an occupational pension scheme, (b) it is incurred while the administrative receiver is in office, and (c) it is in respect of services rendered wholly or partly after the adoption of the contract. (2B) Where a sum payable in respect of a liability which is a qualifying liability for the purposes of subsection (1)(b) is payable in respect of services rendered partly before and partly after the adoption of the contract, liability under subsection (1)(b) shall only extend to so much of the sum as is payable in respect of services rendered after the adoption of the contract. (2C) For the purposes of subsections (2A) and (2B)— (a) wages or salary payable in respect of a period of holiday or absence from work through sickness or other good cause are deemed to be wages or (as the case may be) salary in respect of services rendered in that period, and (b) a sum payable in lieu of holiday is deemed to be wages or (as the case may be) salary in respect of services rendered in the period by reference to which the holiday entitlement arose. (2D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) This section does not limit any right to indemnity which the administrative receiver would have apart from it, nor limit his liability on contracts entered into or adopted without authority, nor confer any right to indemnity in respect of that liability.

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45 Vacation of office.

(1) An administrative receiver of a company may at any time be removed from office by order of the court (but not otherwise) and may resign his office by giving notice of his resignation in the prescribed manner to such persons as may be prescribed. (2) An administrative receiver shall vacate office if he ceases to be qualified to act as an insolvency practitioner in relation to the company. (3) Where at any time an administrative receiver vacates office— (a) his remuneration and any expenses properly incurred by him, and (b) any indemnity to which he is entitled out of the assets of the company, shall be charged on and paid out of any property of the company which is in his custody or under his control at that time in priority to any security held by the person by or on whose behalf he was appointed. (4) Where an administrative receiver vacates office otherwise than by death, he shall, within 14 days after his vacation of office, send a notice to that effect to the registrar of companies. (5) If an administrative receiver without reasonable excuse fails to comply with subsection (4), he is liable to a fine and, for continued contravention, to a daily default fine.

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46 Information to be given by administrative receiver.

(1) Where an administrative receiver is appointed, he shall— (a) forthwith send to the company and publish in the prescribed manner a notice of his appointment, and (b) within 28 days after his appointment, unless the court otherwise directs, send such a notice to all the creditors of the company (so far as he is aware of their addresses). (2) This section and the next do not apply in relation to the appointment of an administrative receiver to act— (a) with an existing administrative receiver, or (b) in place of an administrative receiver dying or ceasing to act, except that, where they apply to an administrative receiver who dies or ceases to act before they have been fully complied with, the references in this section and the next to the administrative receiver include (subject to the next subsection) his successor and any continuing administrative receiver. (3) If the company is being wound up, this section and the next apply notwithstanding that the administrative receiver and the liquidator are the same person, but with any necessary modifications arising from that fact. (4) If the administrative receiver without reasonable excuse fails to comply with this section, he is liable to a fine and, for continued contravention, to a daily default fine.

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47 Statement of affairs to be submitted.

(1) Where an administrative receiver is appointed, he shall forthwith require some or all of the persons mentioned below to make out and submit to him a statement in the prescribed form as to the affairs of the company. (2) A statement submitted under this section shall be verified by a statement of truth by the persons required to submit it and shall show— (a) particulars of the company’s assets, debts and liabilities; (b) the names and addresses of its creditors; (c) the securities held by them respectively; (d) the dates when the securities were respectively given; and (e) such further or other information as may be prescribed. (3) The persons referred to in subsection (1) are— (a) those who are or have been officers of the company; (b) those who have taken part in the company’s formation at any time within one year before the date of the appointment of the administrative receiver; (c) those who are in the company’s employment, or have been in its employment within that year, and are in the administrative receiver’s opinion capable of giving the information required; (d) those who are or have been within that year officers of or in the employment of a company which is, or within that year was, an officer of the company. In this subsection “employment” includes employment under a contract for services. (4) Where any persons are required under this section to submit a statement of affairs to the administrative receiver, they shall do so (subject to the next subsection) before the end of the period of 21 days beginning with the day after that on which the prescribed notice of the requirement is given to them by the administrative receiver. (5) The administrative receiver, if he thinks fit, may— (a) at any time release a person from an obligation imposed on him under subsection (1) or (2), or (b) either when giving notice under subsection (4) or subsequently, extend the period so mentioned; and where the administrative receiver has refused to exercise a power conferred by this subsection, the court, if it thinks fit, may exercise it. (6) If a person without reasonable excuse fails to comply with any obligation imposed under this section, he is liable to a fine and, for continued contravention, to a daily default fine.

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48 Report by administrative receiver.

(1) Where an administrative receiver is appointed, he shall, within 3 months (or such longer period as the court may allow) after his appointment, send to the registrar of companies, to any trustees for secured creditors of the company and (so far as he is aware of their addresses) to all such creditors , other than opted-out creditors, a report as to the following matters, namely— (a) the events leading up to his appointment, so far as he is aware of them; (b) the disposal or proposed disposal by him of any property of the company and the carrying on or proposed carrying on by him of any business of the company; (c) the amounts of principal and interest payable to the debenture holders by whom or on whose behalf he was appointed and the amounts payable to preferential creditors; and (d) the amount (if any) likely to be available for the payment of other creditors. (2) The administrative receiver shall also, within 3 months (or such longer period as the court may allow) after his appointment, either— (a) send a copy of the report (so far as he is aware of their addresses) to all unsecured creditors of the company , other than opted-out creditors, or (b) publish in the prescribed manner a notice stating an address to which unsecured creditors of the company should write for copies of the report to be sent to them free of charge, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) Where the company has gone or goes into liquidation, the administrative receiver— (a) shall, within 7 days after his compliance with subsection (1) or, if later, the nomination or appointment of the liquidator, send a copy of the report to the liquidator, and (b) where he does so within the time limited for compliance with subsection (2), is not required to comply with that subsection. (5) A report under this section shall include a summary of the statement of affairs made out and submitted to the administrative receiver under section 47 and of his comments (if any) upon it. (6) Nothing in this section is to be taken as requiring any such report to include any information the disclosure of which would seriously prejudice the carrying out by the administrative receiver of his functions. (7) Section 46(2) applies for the purposes of this section also. (8) If the administrative receiver without reasonable excuse fails to comply with this section, he is liable to a fine and, for continued contravention, to a daily default fine.

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49 Committee of creditors.

(1) Where an administrative receiver has sent or published a report as mentioned in section 48(2) the company's unsecured creditors may, in accordance with the rules, establish a committee (“the creditors’ committee”) to exercise the functions conferred on it by or under this Act. (2) If such a committee is established, the committee may, on giving not less than 7 days’ notice, require the administrative receiver to attend before it at any reasonable time and furnish it with such information relating to the carrying out by him of his functions as it may reasonably require.

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50 Extent of this Chapter.

This Chapter extends to Scotland only.

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51 Power to appoint receiver.

(1) It is competent under the law of Scotland for the holder of a floating charge over all or any part of the property (including uncalled capital), which may from time to time be comprised in the property and undertaking of an incorporated company (whether a company registered under the Companies Act 2006 or not) (a) which the Court of Session has jurisdiction to wind up; or (b) where paragraph (a) does not apply, in respect of which a court of a member state ... has under the EU Regulation jurisdiction to open insolvency proceedings, to appoint a receiver of such part of the property of the company as is subject to the charge. (2) It is competent under the law of Scotland for the court, on the application of the holder of such a floating charge, to appoint a receiver of such part of the property of the company as is subject to the charge. (2ZA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2A) Subsections (1) and (2) are subject to section 72A. (3) The following are disqualified from being appointed as receiver— (a) a body corporate; (b) an undischarged bankrupt; and (ba) a person subject to a bankruptcy restrictions order; (c) a firm according to the law of Scotland. (4) A body corporate or a firm according to the law of Scotland which acts as a receiver is liable to a fine. (5) An undischarged bankrupt or a person subject to a bankruptcy restrictions order who so acts is liable to imprisonment or a fine, or both. (6) In this section, “receiver” includes joint receivers ; and “bankruptcy restrictions order” means— a bankruptcy restrictions order made under section 155 of the Bankruptcy (Scotland) Act 2016; ... a bankruptcy restrictions order made under paragraph 1 of Schedule 4A to this Act; or a bankruptcy restrictions undertaking entered into under paragraph 7 of that Schedule. “the EU Regulation” is Regulation (EU) 2015/848 of the European Parliament and of the Council on insolvency proceedings as that Regulation has effect in the law of the European Union; “court” is to be construed in accordance with Article 2(6) of the EU Regulation; “insolvency proceedings” is to be construed in accordance with Article 2(4) of the EU Regulation.

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52 Circumstances justifying appointment.

(1) A receiver may be appointed under section 51(1) by the holder of the floating charge on the occurrence of any event which, by the provisions of the instrument creating the charge, entitles the holder of the charge to make that appointment and, in so far as not otherwise provided for by the instrument, on the occurrence of any of the following events, namely— (a) the expiry of a period of 21 days after the making of a demand for payment of the whole or any part of the principal sum secured by the charge, without payment having been made; (b) the expiry of a period of 2 months during the whole of which interest due and payable under the charge has been in arrears; (c) the making of an order or the passing of a resolution to wind up the company; (d) the appointment of a receiver by virtue of any other floating charge created by the company. (2) A receiver may be appointed by the court under section 51(2) on the occurrence of any event which, by the provisions of the instrument creating the floating charge, entitles the holder of the charge to make that appointment and, in so far as not otherwise provided for by the instrument, on the occurrence of any of the following events, namely— (a) where the court, on the application of the holder of the charge, pronounces itself satisfied that the position of the holder of the charge is likely to be prejudiced if no such appointment is made; (b) any of the events referred to in paragraphs (a) to (c) of subsection (1).

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53 Mode of appointment by holder of charge.

(1) The appointment of a receiver by the holder of the floating charge under section 51(1) shall be by means of an instrument subscribed in accordance with the Requirements of Writing (Scotland) Act 1995 (“the instrument of appointment”), a copy (certified in the prescribed manner to be a correct copy) whereof shall be delivered by or on behalf of the person making the appointment to the registrar of companies for registration within 7 days of its execution and shall be accompanied by a notice in the prescribed form. (2) If any person without reasonable excuse makes default in complying with the requirements of subsection (1), he is liable to a fine and, for continued contravention, to a daily default fine. (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) If the receiver is to be appointed by the holders of a series of secured debentures, the instrument of appointment may be executed on behalf of the holders of the floating charge by any person authorised by resolution of the debenture-holders to execute the instrument. (5) On receipt of the certified copy of the instrument of appointment in accordance with subsection (1), the registrar shall, on payment of the prescribed fee, enter the particulars of the appointment in the register. (6) The appointment of a person as a receiver by an instrument of appointment in accordance with subsection (1)— (a) is of no effect unless it is accepted by that person before the end of the business day next following that on which the instrument of appointment is received by him or on his behalf, and (b) subject to paragraph (a), is deemed to be made on the day on and at the time at which the instrument of appointment is so received, as evidenced by a written docquet by that person or on his behalf; and this subsection applies to the appointment of joint receivers subject to such modifications as may be prescribed. (7) On the appointment of a receiver under this section, the floating charge by virtue of which he was appointed attaches to the property then subject to the charge; and such attachment has effect as if the charge was a fixed security over the property to which it has attached.

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54 Appointment by court.

(1) Application for the appointment of a receiver by the court under section 51(2) shall be by petition to the court, which shall be served on the company. (2) On such an application, the court shall, if it thinks fit, issue an interlocutor making the appointment of the receiver. (3) A copy (certified by the clerk of the court to be a correct copy) of the court’s interlocutor making the appointment shall be delivered by or on behalf of the petitioner to the registrar of companies for registration, accompanied by a notice in the prescribed form, within 7 days of the date of the interlocutor or much longer period as the court may allow. If any person without reasonable excuse makes default in complying with the requirements of this subsection, he is liable to a fine and, for continued contravention, to a daily default fine. (4) On receipt of the certified copy interlocutor in accordance with subsection (3), the registrar shall, on payment of the prescribed fee, enter the particulars of the appointment in the register. (5) The receiver is to be regarded as having been appointed on the date of his being appointed by the court. (6) On the appointment of a receiver under this section, the floating charge by virtue of which he was appointed attaches to the property then subject to the charge; and such attachment has effect as if the charge were a fixed security over the property to which it has attached. (7) In making rules of court for the purposes of this section, the Court of Session shall have regard to the need for special provision for cases which appear to the court to require to be dealt with as a matter of urgency.

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55 Powers of receiver.

(1) Subject to the next subsection, a receiver has in relation to such part of the property of the company as is attached by the floating charge by virtue of which he was appointed, the powers, if any, given to him by the instrument creating that charge. (2) In addition, the receiver has under this Chapter the powers as respects that property (in so far as these are not inconsistent with any provision contained in that instrument) which are specified in Schedule 2 to this Act. (3) Subsections (1) and (2) apply— (a) subject to the rights of any person who has effectually executed diligence on all or any part of the property of the company prior to the appointment of the receiver, and (b) subject to the rights of any person who holds over all or any part of the property of the company a fixed security or floating charge having priority, over, or ranking pari passu with, the floating charge by virtue of which the receiver was appointed. (4) A person dealing with a receiver in good faith and for value is not concerned to enquire whether the receiver is acting within his powers.

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56 Precedence among receivers.

(1) Where there are two or more floating charges subsisting over all or any part of the property of the company, a receiver may be appointed under this Chapter by virtue of each such charge; but a receiver appointed by, or on the application of, the holder of a floating charge having priority of ranking over any other floating charge by virtue of which a receiver has been appointed has the powers given to a receiver by section 55 and Schedule 2 to the exclusion of any other receiver. (2) Where two or more floating charges rank with one another equally, and two or more receivers have been appointed by virtue of such charges, the receivers so appointed are deemed to have been appointed as joint receivers. (3) Receivers appointed, or deemed to have been appointed, as joint receivers shall act jointly unless the instrument of appointment or respective instruments of appointment otherwise provide. (4) Subject to subsection (5) below, the powers of a receiver appointed by, or on the application of, the holder of a floating charge are suspended by, and as from the date of, the appointment of a receiver by, or on the application of, the holder of a floating charge having priority of ranking over that charge to such extent as may be necessary to enable the receiver second mentioned to exercise his powers under section 55 and Schedule 2; and any powers so suspended take effect again when the floating charge having priority of ranking ceases to attach to the property then subject to the charge, whether such cessation is by virtue of section 62(6) or otherwise. (5) The suspension of the powers of a receiver under subsection (4) does not have the effect of requiring him to release any part of the property (including any letters or documents) of the company from his control until he receives from the receiver superseding him a valid indemnity (subject to the limit of the value of such part of the property of the company as is subject to the charge by virtue of which he was appointed) in respect of any expenses, charges and liabilities he may have incurred in the performance of his functions as receiver. (6) The suspension of the powers of a receiver under subsection (4) does not cause the floating charge by virtue of which he was appointed to cease to attach to the property to which it attached by virtue of section 53(7) or 54(6). (7) Nothing in this section prevents the same receiver being appointed by virtue of two or more floating charges.

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57 Agency and liability of receiver for contracts.

(1) A receiver is deemed to be the agent of the company in relation to such property of the company as is attached by the floating charge by virtue of which he was appointed. (1A) Without prejudice to subsection (1), a receiver is deemed to be the agent of the company in relation to any contract of employment adopted by him in the carrying out of his functions. (2) A receiver (including a receiver whose powers are subsequently suspended under section 56) is personally liable on any contract entered into by him in the performance of his functions, except in so far as the contract otherwise provides, and , to the extent of any qualifying liability,on any contract of employment adopted by him in the carrying out of those functions. (2A) For the purposes of subsection (2), a liability under a contract of employment is a qualifying liability if— (a) it is a liability to pay a sum by way of wages or salary or contribution to an occupational pension scheme, (b) it is incurred while the receiver is in office, and (c) it is in respect of services rendered wholly or partly after the adoption of the contract. (2B) Where a sum payable in respect of a liability which is a qualifying liability for the purposes of subsection (2) is payable in respect of services rendered partly before and partly after the adoption of the contract, liability under that subsection shall only extend to so much of the sum as is payable in respect of services rendered after the adoption of the contract. (2C) For the purposes of subsections (2A) and (2B)— (a) wages or salary payable in respect of a period of holiday or absence from work through sickness or other good cause are deemed to be wages or (as the case may be) salary in respect of services rendered in that period, and (b) a sum payable in lieu of holiday is deemed to be wages or (as the case may be) salary in respect of services rendered in the period by reference to which the holiday entitlement arose. (2D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) A receiver who is personally liable by virtue of subsection (2) is entitled to be indemnified out of the property in respect of which he was appointed. (4) Any contract entered into by or on behalf of the company prior to the appointment of a receiver continues in force (subject to its terms) notwithstanding that appointment, but the receiver does not by virtue only of his appointment incur any personal liability on any such contract. (5) For the purposes of subsection (2), a receiver is not to be taken to have adopted a contract of employment by reason of anything done or omitted to be done within 14 days after his appointment. (6) This section does not limit any right to indemnity which the receiver would have apart from it, nor limit his liability on contracts entered into or adopted without authority, nor confer any right to indemnity in respect of that liability. (7) Any contract entered into by a receiver in the performance of his functions continues in force (subject to its terms) although the powers of the receiver are subsequently suspended under section 56.

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58 Remuneration of receiver.

(1) The remuneration to be paid to a receiver is to be determined by agreement between the receiver and the holder of the floating charge by virtue of which he was appointed. (2) Where the remuneration to be paid to the receiver has not been determined under subsection (1), or where it has been so determined but is disputed by any of the persons mentioned in paragraphs (a) to (d) below, it may be fixed instead by the Auditor of the Court of Session on application made to him by— (a) the receiver; (b) the holder of any floating charge or fixed security over all or any part of the property of the company; (c) the company; or (d) the liquidator of the company. (3) Where the receiver has been paid or has retained for his remuneration for any period before the remuneration has been fixed by the Auditor of the Court of Session under subsection (2) any amount in excess of the remuneration so fixed for that period, the receiver or his personal representatives shall account for the excess.

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59 Priority of debts.

(1) Where a receiver is appointed and the company is not at the time of the appointment in course of being wound up, the debts which fall under subsection (2) of this section shall be paid out of any assets coming to the hands of the receiver in priority to any claim for principal or interest by the holder of the floating charge by virtue of which the receiver was appointed. (2) Debts falling under this subsection are preferential debts (within the meaning given by section 386 in Part XII) which, by the end of a period of 6 months after advertisement by the receiver for claims in the Edinburgh Gazette and in a newspaper circulating in the district where the company carries on business either— (i) have been intimated to him, or (ii) have become known to him. (3) Any payments made under this section shall be recouped as far as may be out of the assets of the company available for payment of ordinary creditors.

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