PART I: INTERPRETATION

1       Miscellaneous definitions

1(1) In the Arrangement, except where the context otherwise demands:

1. “the Act” means the Insolvency Act 1986 as amended; 

2. “the Arrangement” means the Proposal and the Conditions read together; 

3. “Associate” shall have the meaning given to it in section 435 of the Act; 

4. “the Conditions” are these Conditions; 

5. “the Court” means any court having jurisdiction in respect of the Arrangement;

6. “Creditor” is a person bound by the Arrangement to whom a Debt is owed; 

7. “Debt” has the meaning given to it in section 382 of the Act with the modifications necessary to refer to a voluntary arrangement; 

8. “the Debtor” means the person who makes the Proposal;

9. “Decision Date” has the meaning given by Rule 15.2(1) of the Rules with the modifications necessary to refer to a voluntary arrangement.

10. “a Decision Procedure” has the meaning given by Section 379ZA of the Act and paragraph 15.3 of the Rules with the modifications necessary to refer to a voluntary arrangement.

11. “Distress” includes but is not limited to the use of the procedure according to section 72 of the Tribunals, Courts and Enforcement Act 2007 as set out in Schedule 12 of the said Act and references to levying distress, seizing goods and related expressions shall be construed accordingly.  

12. “Dividend” means a distribution to Creditors;

13. “Excluded Assets” are those assets identified in the Proposal as being excluded from the Arrangement; 

14. “Paragraphs” are Paragraphs of these Conditions; and “Sub-paragraph” shall be construed accordingly;

15. “Preferential Creditor” is a Creditor with a Debt falling within section 386 of the Act and “Preferential Debt” shall be construed accordingly;

16. “Proof” means a proof of claim in accordance with Rules 14.2 to 14.4 of the Rules with the modifications necessary to refer to a voluntary arrangement. 

17. “Property” has the meaning given to it in section 436 of the Act; 

18. “the Proposal” is the document annexed hereto together with modifications and documents incorporated thereto, being a proposal under Part VIII of the Act; 

19. “the Rules” means the Insolvency (England and Wales) Rules 2016 as amended; 

20. “Security” has the meaning given to it in section 383 of the Act; and “Secured Creditor” shall be construed accordingly; 

21. “the Secretary of State” means the Secretary of State for Business, Energy and Industrial Strategy or any successor office;

22. “the Supervisor” is the person or persons for the time being appointed to supervise the implementation of the Arrangement;

23. “the Trust Realisation Period” is the period of time from commencement of the Arrangement and continues, notwithstanding expiry, termination or full implementation of the Arrangement until the realisation and distribution of sums due to Creditors under the Arrangement terms.

1(2) References in the Arrangement to any statutory provision shall include a reference to any modification or re-enactment thereof for the time being in force.

2        The Conditions

2 The Conditions are an integral part of the Arrangement. In the event of any ambiguity or conflict between the Conditions and the Proposal and any modifications to it, the Proposal as modified shall prevail.

PART II: COMMENCEMENT, EFFECT AND DURATION OF ARRANGEMENT

3        Commencement of Arrangement

3 The Arrangement shall come into effect upon the approval thereof by the Creditors pursuant to the provisions of the Act and Rules.

4        Nature and effect of the Arrangement

4(1) [Nature of Arrangement] The Arrangement is a proposal under Part VIII of the

Act for a scheme of arrangement of the Debtor’s affairs or a composition in full and final satisfaction of the Debtor’s Debts. 

4(2) [Claims against third parties] Unless the Proposal indicates to the contrary, nothing in the Arrangement shall be construed as effecting a composition or satisfaction of any Debt owed by a person other than the Debtor, whether that Debt is owed jointly by the Debtor or otherwise.

4(3) [Restriction on Creditors’ rights] After the commencement of the Arrangement, no Creditor shall, in respect of any Debt which is subject to the Arrangement:

1. have any remedy against the property or person of the Debtor;

2. commence or continue any action or other legal proceeding against the Debtor. 4(4) [Suspension of limitation period] The Debtor agrees that any limitation period accruing in respect of a Debt which is subject to the Arrangement shall be suspended until expiry, termination or full implementation of the Arrangement, whichever is sooner.       

4(5) [Saving for certain rights] Nothing in this Paragraph or elsewhere in the Conditions shall be construed as affecting the following rights:

1. the right of any Secured Creditor to enforce his Security, except with the Secured Creditor’s consent;

2. the right of the Supervisor or any Creditor to present a bankruptcy petition under section 264(1)(c) of the Act for default in connection with the Arrangement

3. the right of any Creditor to bring or continue legal proceedings against the

Debtor and to obtain a judgment against the Debtor in the full amount of its

Debt for the sole purpose of making a claim against an insurer of the Debtor by virtue of the Third Party (Rights Against Insurers) Act 2010.

5        Existing proceedings against Debtor

5(1) [Discontinuance of existing proceedings] Legal proceedings against the Debtor in existence at the commencement of the Arrangement in respect of Debts which are subject to the Arrangement shall, unless they are of a type contemplated by Paragraph 4(5) or the Supervisor otherwise directs, be discontinued by the Creditor with no order as to costs as soon after the commencement of the Arrangement as is practicable. 5(2) [Waiver of Debtor’s costs entitlement on discontinuance] The Debtor confirms that no costs entitlement arising as a result of the discontinuance of any legal action in accordance with Sub-paragraph (1) will be enforced and the Debtor waives any such rights.

5(3) [Costs of existing proceedings] Legal costs of a Creditor in proceedings other than bankruptcy referred to in Sub-paragraph (1) shall be a Debt falling within the Arrangement.

5(4) [Costs of bankruptcy proceedings] Petition costs of a Creditor who presented a bankruptcy petition against the Debtor prior to the commencement of the Arrangement shall be treated as an expense of the Arrangement to rank after the costs of the Nominee but before those of the Supervisor.

5(5) [Prior distress – Interim order case] Where any person has distrained on the goods or effects of the Debtor in the period of three months prior to the making of the interim order, those goods or effects, or the proceeds of their sale, shall be charged with the Preferential Debts of the Debtor to the extent that the assets of the Arrangement are insufficient for meeting those debts. 

5(6) [Prior distress - No Interim Order case] Where any person has distrained on the goods or effects of the Debtor in the period of three months prior to the commencement of the Arrangement, those goods or effects, or the proceeds of their sale, shall be charged with the Preferential Debts of the Debtor to the extent that the assets of the Arrangement are insufficient for meeting those debts.

6       Existing execution against Debtor’s assets

6(1) [Partly-completed execution] A Creditor who, before the commencement of the Arrangement, has issued execution against the goods or land of the Debtor in respect of a Debt which is subject to the Arrangement, or has attached a Debt due to the Debtor from another person in respect of such a Debt shall, unless the execution or attachment was completed before the commencement of the Arrangement, discontinue the execution or attachment as soon after the commencement of the Arrangement as is practicable.

6(2) [Completion of execution or attachment] For the purposes of Sub-paragraph

(1):

1. an execution against goods is completed by seizure and sale or by the making of a charging order absolute under section 1 of the Charging Orders Act 1979;

2. an execution against land is completed by seizure, by the appointment of a receiver or by the making of a charging order absolute under section 1 of the Charging Orders Act 1979;

3. an attachment of a Debt is completed by the receipt of the Debt.

7      Mutual credit and set-off

7(1) [Application] This Paragraph applies where before the commencement of the Arrangement there have been mutual credits, mutual Debts or other mutual dealings between the Debtor and any Creditor other than in the circumstances to which Paragraph 79 of these Conditions apply.

7(2) [Account to be taken] An account shall be taken of what is due from each party to the other in respect of the mutual dealings and the sums due from one party shall be set-off against the sums due from the other.

7(3) [No account where Creditor has notice] Sums due from the Debtor to another party shall not be included in the account taken under Sub-paragraph (2) if that other party had notice at the time they became due that a bankruptcy petition relating to the Debtor was pending or that an interim order was made in relation to the Debtor. 7(4) [Restriction on post-commencement set-off] Other than as provided for in this Paragraph, set-off shall not be available in respect of any Debt or item of Property. 7(5) [Balance provable or to be paid] Only the balance (if any) of the account taken under Sub-paragraph (2) is provable in the Arrangement or, as the case may be, to be paid to the Debtor or, if the Proposal so provides, to the Supervisor.

8        Duration and expiry of Arrangement

8(1) [General rule] Unless extended under the provisions of these Conditions, the Arrangement shall continue until the end of the period stated in the Proposal at which time it shall expire by effluxion of time.

8(2) [Extension of duration by Supervisor] The Supervisor may extend the duration of the Arrangement by sending a notice to this effect (“an Extension Notice”) to the Debtor and all Creditors. This may be done on up to 2 occasions: for a period of up to 6 months in the first instance and for a period of up to 3 months in the second instance.

8(3) [Extension Notice] An Extension Notice shall be sent not less than 7 days prior to the date upon which the Arrangement is otherwise due to be fully implemented and must state the reason or reasons for the extension.

8(4) [Effect of extension] In the event of an Extension Notice being sent, the Arrangement shall continue for the period specified therein, or for the maximum allowable period for that extension (being 6 months for a first extension and 3 months for a second extension) commencing on the date immediately after that on which the Arrangement would otherwise have been fully implemented, whichever is sooner. 8(5) [Supervening notice of a decision procedure] If a Decision Procedure has been initiated by the Supervisor with a Decision Date after the Arrangement would otherwise have expired, the duration of the Arrangement shall be extended to the Decision Date.  

8(6) [Further extension] Any extension for a period longer than that provided for under Sub-paragraph (2) shall require approval as a variation of the Arrangement.

9        Full Implementation of Arrangement

9(1) [Certificate of full implementation] Upon the full implementation of the Arrangement, the Supervisor shall, if the Debtor has complied with his obligations under the Arrangement, issue a notice (“the Certificate of full implementation”) stating that the arrangement has been fully implemented.

9(2) [Effect of full implementation] Save to the extent provided in Paragraph 4(5), upon the issue by the Supervisor of a Certificate of full implementation, the Debtor shall be released from all Debts which are subject to the Arrangement.

9(3) [Notification of full implementation] Copies of the Certificate of full implementation issued under this Paragraph shall be sent by the Supervisor to the Debtor, the Creditors and the Secretary of State together with the Supervisor’s report under Rule 8.31 (termination or full implementation of the IVA).

10      Substantial Compliance

10(1) [Issue of notice where substantial compliance] The Supervisor may issue a Certificate of full implementation notwithstanding that the Debtor has not complied with all of his obligations under the Arrangement provided the Debtor has:

1. made all the payments required under the terms of the Arrangement;

2. provided a full explanation of any breach of the terms of the Arrangement  required by the Supervisor;

3. paid to the Supervisor such sum (if any) as the Supervisor shall reasonably have required to compensate the Creditors for any reduction in Dividend caused by the Debtor’s breach of the terms of the Arrangement.

10(2) [Notification to creditors] Where the Supervisor proposes to issue a Certificate of full implementation under Sub-paragraph (1), he shall notify the Creditors and invite them to submit any comments within 21 days from the date of notification. 10(3) [Treatment as full implementation] If the Supervisor issues a Certificate of full implementation under Sub-paragraph (1), the Arrangement shall be treated as fully implemented for the purposes of Rule 8.31 (termination or full implementation of the IVA).

11      Termination of Arrangement

11(1) [Termination in certain circumstances] The Arrangement shall terminate upon the earlier of:

(a)      the Supervisor issuing a Notice of Termination under Paragraph 71; (b) the making of a bankruptcy order against the Debtor;

(c)    the Debtor’s death.

11(2) [Notice of termination] The Supervisor shall, on discovering the occurrence of a terminating event, but in any event not more than 28 days after such discovery, give notice of such termination and its reason to the Debtor (or, if the Debtor has died, his representative), Creditors and the Secretary of State, together with the supervisor’s report under Rule 8.31 (termination or full implementation of the IVA).

PART III: SUPERVISOR’S FUNCTIONS, POWERS ETC

12      Supervisor’s functions

12(1) [Primary function] The Supervisor’s primary function is to supervise performance of the Debtor’s obligations under the Arrangement and to administer the Arrangement.

12(2) [Other functions] The Supervisor shall also undertake such functions as are given to him in the Proposal, Act and Rules.

13      Supervisor’s powers

13(1) Subject to those powers more particularly given in the Arrangement, Act and Rules, the Supervisor shall have the following powers:

1. [Getting in assets] power to take possession of, collect, get in and hold any or all of the assets which, under the terms of the Arrangement, the Supervisor is to hold as trustee;

2. [Realisation of assets] power to sell or otherwise dispose of any asset referred to in Sub-paragraph (1) in such manner as may seem to the Supervisor expedient;

3. [Putting funds on deposit] power to place money coming into the Supervisor’s hands during the course of the Arrangement on deposit with any established United Kingdom clearing bank or building society;

4. [Appointing agents] power to engage legal representatives, managers, agents and other persons to assist in the performance of the Supervisor’s functions under the Arrangement;

5. [Delegation] power to delegate to the Supervisor’s firm and any appropriate partner, employee or agent thereof any or all of the Supervisor’s duties and functions under the Arrangement save those which by law the Supervisor is required to perform personally;

6. [Insurance] power to effect and maintain insurances in respect of any asset subject to the Arrangement;

7. [Power to claim] power to prove, rank, claim and draw a dividend in respect of such debts owed to the Debtor as fall within the Arrangement;

8. [Power to direct Debtor] power, in the event that the Supervisor is unable or it is impracticable to do any act or thing which the Supervisor is empowered to do himself, to direct the Debtor to do that act or thing;

9. [Ancillary power] power to do any other act or thing which is necessary or expedient for the purposes of exercising the above powers or for carrying out the Supervisor’s functions under the Arrangement.

13(2) Where more than one person is appointed as Supervisor, any act required or authorised to be done under any enactment or otherwise may be done by all or any one or more of the persons for the time being holding office.

14     Supervisor’s powers after expiry, full implementation or termination

14(1) [Exercise of powers] The expiry, full implementation or termination of the

Arrangement shall not affect the Supervisor’s power to carry out such functions and to exercise such powers as are necessary for the Supervisor to fully carry out the duties, obligations and responsibilities of the Supervisor under the Arrangement, Act and Rules and to resolve such matters as may have arisen during the course of the Arrangement. This includes, but is not limited to, any duties, obligations and responsibilities in respect of assets held by the Supervisor on trust. 

14(2) [Retention of funds by Supervisor] Upon the expiry, full implementation or termination of the Arrangement, the Supervisor shall be entitled to retain, for such period as is reasonably necessary and from any funds under the Supervisor’s control, such monies as the Supervisor reasonably thinks fit on account of fees, costs, charges, liabilities and expenses, and the Supervisor shall advise Creditors and the Debtor in writing of the quantum of the funds so retained and the reasons why.

15      Exercise of Supervisor’s functions and powers

15(1) [Application of bankruptcy provisions] In the event that the Arrangement does not provide guidance to the Supervisor as to what action should be taken in any given situation, the Supervisor shall apply the provisions of the Act and Rules in so far as they relate to bankruptcy with necessary modifications to refer to a voluntary arrangement.

15(2) [Consultation of Creditors] If the Supervisor is uncertain as to what action should be taken in any situation, or wishes to ascertain the wishes of Creditors on a matter concerning the Arrangement, the Supervisor may seek the advice and/or direction of the Creditors’ Committee and/or the majority or most material of the Creditors and he may act upon such advice and/or direction.

15(3) [Directions from the Court] This Paragraph is without prejudice to the Supervisor’s right to refer matters concerning the Arrangement to the Court for guidance and/or directions. 

16     Restriction upon Supervisor’s duty and liability

16(1) [Supervisor’s duty] The Supervisor shall be under no obligation to perform any act or carry out any function save for those expressly provided for in the Arrangement, the Act or Rules.

16(2) [Supervisor’s liability] Neither the Supervisor, the Supervisor’s firm or any of the Supervisor’s agents or employees shall incur any personal liability in negligence or otherwise for any act or omission in connection with the Arrangement, unless such act or omission constitutes one of dishonesty or a breach of the Supervisor’s obligations under the Act, Rules or the Arrangement.

17      Supervisor’s fees, costs and expenses

17(1) [Amount of fees] The Supervisor shall be entitled to charge fees for services  in accordance with the time actually and reasonably expended by the Supervisor and the Supervisor’s staff in carrying out the Supervisor’s functions under the Arrangement by reference to the ordinary hourly rates of the Supervisor and the Supervisor’s staff as shall apply from time to time. 

17(2) [Payment of fees, costs and expenses] The fees, costs, charges and expenses of the Supervisor shall be paid out of the assets of the Arrangement from time to time as the Supervisor thinks fit.  The Supervisor shall provide such information to any Creditors’ Committee appointed in relation to the Arrangement as is reasonably necessary to explain how the fees, costs, charges and expenses were determined or incurred, as the case may be.

17(3) [Supervisor’s right of recourse to Court] If the Supervisor is dissatisfied with a determination of the Creditors’ Committee or a decision of Creditors on a matter involving fees, costs, charges and/or expenses, the Supervisor shall have the right to refer the matter to the Court, whose decision on the matter shall bind all parties.

18      Supervisor’s resignation

18(1) [Methods of resignation] A Supervisor may resign from office with the approval of Creditors sought via a Decision Procedure, with the permission of the Court or in the circumstances set out in 18(3) below.

18(2) [Grounds of Supervisor’s resignation] The sole Supervisor may only resign from office on one or more of the following grounds:

1. ill health;

2. cessation of practice as an insolvency practitioner;

3. change of circumstances rendering it impracticable for him to continue in office. 18(3) [More than one supervisor] Where there is more than one supervisor in office, a supervisor may resign without seeking the approval of the creditors or permission of the court where it is considered to be impracticable or no longer necessary to have the present number of persons acting as Supervisor to the Arrangement and at least one supervisor shall remain in office notwithstanding the resignation. In these circumstances notice of the resignation of a supervisor shall be given in the next report to creditors when otherwise due.  

18(4) [Report of Supervisor’s administration] The notice to Creditors in a Decision Procedure for the purpose of receiving the  resignation of a sole supervisor shall specify the grounds upon which the Supervisor wishes to resign and shall be accompanied by a report of the Supervisor’s administration of the Arrangement which includes an up to date summary of his receipts and payments.

19     Removal of Supervisor from office

19(1) [Methods of removal] The Supervisor may be removed from office by only an order of the Court, or by a decision of the Creditors requested specifically for that purpose.

19(2) [Notice of requisitioned decision procedure] Any notice served by a Creditor upon the Supervisor under Paragraph 61(5) (content of notice requisitioning a decision) for the purpose of initiating a decision of Creditors to remove the Supervisor from office must set out the grounds upon which removal is sought.

19(3) [Report of Supervisor’s administration] The notice sent out by the Supervisor to Creditors convening such a decision procedure shall specify the grounds upon which removal is sought and shall be accompanied by a report of the Supervisor’s administration of the Arrangement including an up to date summary of receipts and payments.

20      Vacation of Office by Supervisor

20(1) [Resignation/removal of Supervisor where more than one acting] If the Creditors resolve  to remove a Supervisor from office, or a joint supervisor resigns, and there will be another person in the office of Supervisor for the time being, the Supervisor who is resigning or being removed shall vacate office immediately. 20(2) [Resignation/removal of Supervisor where no other acting] If the Creditors resolve to accept a Supervisor’s resignation or to remove a Supervisor from office, and there is no other person in the office of Supervisor for the time being, that resignation and/or removal shall not take effect and the Supervisor shall not vacate office unless and until the Creditors, by a Decision Procedure or the Court, appoints a replacement Supervisor.

20(3) [Loss of qualification] The Supervisor shall vacate office immediately if the Supervisor ceases to be a person who is for the time being qualified to act.

20(4) [Notice of vacation of office] A Supervisor who, for any reason other than as set out in paragraph 18(3), vacates office shall forthwith give notice of that fact to the Debtor, the Creditors and the Secretary of State.

20(5) [Duties of Supervisor upon vacation of office] A Supervisor who, for any reason, vacates office shall, as soon as practicable, deliver up to any successor all books, records and papers relating to the Arrangement and the Supervisor’s administration thereof together with all assets of which the Supervisor is a trustee under the terms of the Arrangement.

20(6) [Continuing duty of former Supervisor] Former Supervisors shall be obliged to give such assistance to the Supervisor of the Arrangement from time to time as may be reasonably required for ascertaining what transpired during the tenure of office by the former Supervisor.

21     Vacancy in the office of Supervisor

21(1) [Decision of Creditors to fill vacancy] If, for any reason, there is a vacancy in the office of Supervisor, that vacancy may be filled by the Creditors by way of a Decision Procedure, or by the Court.

21(2) [Seeking appointment where no Supervisor acting] If no Supervisor is in office, the Debtor, any Creditor, any person who was in partnership with the Supervisor immediately before the vacancy occurred, the former Supervisor’s authorising body, or any other interested party may convene a Decision Procedure to fill the vacancy.

21(3) [Chair where no Supervisor acting] In the event that a meeting of Creditors is called when no Supervisor is in office, the convenor shall act as chair of the meeting.

22      Release of Supervisor

22(1) Upon the termination or full implementation of the Arrangement and the Supervisor having dealt with the assets in his possession in accordance with the terms of the Arrangement, the Supervisor shall be released from any further obligations or liability in respect of the Arrangement or any trusts created thereby.

​

PART IV: DEBTOR’S WARRANTY, DUTIES & OBLIGATIONS

23     Debtor’s warranty

23(1) [Disclosure in Proposal] The Debtor warrants that the Proposal discloses full and complete particulars of all matters required under the Act and Rules including (without prejudice to the generality of the foregoing) particulars of all of the Debtor’s assets, debts and liabilities, whether actual, contingent or prospective.

23(2) [Accuracy of Proposal] The Debtor warrants that the contents of the Proposal are true and accurate in all material respects as at the date of the commencement of the Arrangement, subject only to those qualifications that may be disclosed by the Debtor to the Creditors considering the approval of the Arrangement and recorded by the Supervisor in his report under Rule 8.24 (report of the creditors’ consideration of a proposal).

23(3) [Disclosure of third party information] The Debtor authorises any Creditor to disclose to the Supervisor such information relating to the Debtor and the Debtor’s dealings or property as may reasonably be required to assist in the implementation of the Arrangement. 

24     Debtor’s duties in relation to the Supervisor

24(1) [Duty to co-operate with Supervisor] The Debtor undertakes and agrees to:

1. give to the Supervisor such information as to the Debtor’s assets, liabilities and other affairs;

2. attend on the Supervisor and the Supervisor’s agents, representatives or nominees at such times; and (c)  do all such other things; as the Supervisor shall reasonably require for the purpose of carrying out the Supervisor’s functions and duties under the Arrangement, including as trustee and/or following the expiry, full implementation or termination of the Arrangement. 24(2) [Duty to submit accounts] The Debtor undertakes and agrees to furnish the Supervisor with accounts relating to the Debtor’s affairs of such nature, as at such date and for such period as the Supervisor may reasonably require.

24(3) [Notice of after-acquired assets and increased income] Where at any time during the subsistence of the Arrangement any After-Acquired Assets of a description falling within Paragraph 28 are acquired by or devolve upon the Debtor, or there is an increase in the Debtor’s income if the Debtor is under an obligation to make contributions out of income, the Debtor shall forthwith give the Supervisor notice of the property or, as the case may be, of the increase.

25     Further Documents

25 Without prejudice to the generality of the Debtor’s other duties under the Arrangement, the Debtor shall, at the request of the Supervisor, execute such Mortgages, Charges, Deeds, Transfers, Trusts, Powers of Attorney or other documents ​as may reasonably be required by the Supervisor for the protection and/or realisation of assets, to secure the Debtor’s compliance with the Debtor’s obligations under the Arrangement, or otherwise to facilitate the implementation of the Arrangement.