In forceAmended2020 Revised Edition

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Insolvency, Restructuring and Dissolution Act 2018 · 2020 Revised Edition · Part 7 · Judicial Management

96. Effect of company entering judicial management

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Amended

Last amended by an amending law of 2021.

(1)

When a company enters judicial management —

(a)

any receiver, or receiver and manager, must vacate office; and

(b)

any application for the winding up of the company must be dismissed.

(2)

Where any receiver, or receiver and manager, has vacated office under subsection (1)(a), the following must be charged on and, subject to subsection (4), paid out of any property which was in the custody or under the control of the receiver, or receiver and manager, at the time the company enters judicial management, in priority to any security held by the person by or on whose behalf the receiver, or receiver and manager, was appointed:

(a)

the remuneration of, and any expenses properly incurred by, the receiver, or receiver and manager;

(b)

any indemnity to which the receiver, or receiver and manager, is entitled out of the assets or property of the company.

(3)

A receiver, or receiver and manager, of a company who vacates office under subsection (1)(a) is not required, on or after so vacating office, to take steps to comply with any duty imposed on the receiver, or receiver and manager, by section 86.

(4)

During the period in which a company is in judicial management —

(a)

no order may be made, and no resolution may be passed, for the winding up of the company;

(b)

no receiver or manager may be appointed over any property or undertaking of the company;

(c)

no other proceedings may be commenced or continued against the company, except —

(i)

with the consent of the judicial manager; or

(ii)

with the permission of the Court and subject to such terms as the Court may impose;

(d)

no enforcement order or other legal process may be issued, continued or executed, and no distress may be levied, against the company or its property except —

(i)

with the consent of the judicial manager; or

(ii)

with the permission of the Court and subject to such terms as the Court may impose;

(e)

no step may be taken to enforce any security over any property of the company, or to repossess any goods under any hire‑purchase agreement, chattels leasing agreement or retention of title agreement, except —

(i)

with the consent of the judicial manager; or

(ii)

with the permission of the Court and subject to such terms as the Court may impose; and

(f)

despite sections 18 and 18A of the Conveyancing and Law of Property Act 1886, no right of re‑entry or forfeiture under any lease in respect of any premises occupied by the company may be enforced, except —

(i)

with the consent of the judicial manager; or

(ii)

with the permission of the Court and subject to such terms as the Court may impose.

(5)

Subsection (4) does not affect any of the following:

(a)

the exercise of any legal right under any arrangement (including a set‑off arrangement or a netting arrangement) that may be prescribed by regulations;

(b)

the commencement or continuation of any proceedings that may be prescribed by regulations.

Terms defined in this Act

chattels leasing agreement
Defined · s 72A
“chattels leasing agreement”, “hire-purchase agreement” and “retention of title agreement” have the meanings given by section 88(1);
Open s 72A
company
Defined · s 2
“company” has the meaning given by section 4(1) of the Companies Act 1967;
Open s 2
Court
Defined · s 2
“Court” means the General Division of the High Court;
Open s 2
goods
Defined · s 273
“goods” includes all chattels personal;
Open s 273
hire-purchase agreement
Defined · s 72A
“chattels leasing agreement”, “hire-purchase agreement” and “retention of title agreement” have the meanings given by section 88(1);
Open s 72A
judicial manager
Defined · s 88
“judicial manager”, in relation to a company, means a person appointed under this Part to manage the company and its affairs, business and property, but does not, unless a contrary intention appears, include an interim judicial manager;
Open s 88
netting arrangement
Defined · s 61
“netting arrangement” means an arrangement under which 2 or more claims or obligations can be converted into a net claim or obligation, and includes a close‑out netting arrangement (under which actual or theoretical debts are calculated during the course of a contract for the purpose of enabling them to be set off against each other or to be converted into a net debt);
Open s 61
property
Defined · s 2
“property” includes —(a)money, goods, things in action, land and every description of property, wherever situated; and(b)obligations and every description of interest, whether present or future or vested or contingent, arising out of or incidental to property;
Open s 2
regulations
Defined · s 2
“regulations” means regulations made under section 449;
Open s 2
retention of title agreement
Defined · s 72A
“chattels leasing agreement”, “hire-purchase agreement” and “retention of title agreement” have the meanings given by section 88(1);
Open s 72A
security
Defined · s 61
“security” means any mortgage, charge, pledge, lien or other security recognised by law;
Open s 61
set‑off arrangement
Defined · s 61
“set‑off arrangement” means an arrangement under which 2 or more debts, claims or obligations can be set off against each other;
Open s 61