Insolvency Act 1986, Schedule B1, paragraph 52

SCHEDULE B1 ADMINISTRATION

52 (1) Paragraph 51(1) shall not apply where the statement of proposals states that the administrator thinks—

(a) that the company has sufficient property to enable each creditor of the company to be paid in full,

(b) that the company has insufficient property to enable a distribution to be made to unsecured creditors other than by virtue of section 176A(2)(a), or

(c) that neither of the objectives specified in paragraph 3(1)(a) and (b) can be achieved.

(2) But the administrator shall [F1313 seek a decision from the company's creditors as to whether they approve the proposals set out in the statement made under paragraph 49(1) if requested to do soF1313] —

(a) by creditors of the company whose debts amount to at least 10% of the total debts of the company,

(b) in the prescribed manner, and

(c) in the prescribed period.

[F1314 (3) Where a decision is sought by virtue of sub-paragraph (2) the initial decision date (as defined in paragraph 51(3)) must be within the prescribed period.F1314]

(4) The period prescribed under sub-paragraph (3) may be varied in accordance with paragraph 107.

Definitions used in Schedule B1, paragraph 52 3

administrator

1 (1) For the purposes of this Act “administrator” of a company means a person appointed under this Schedule to manage the company’s affairs, business and property.

Defined in Sch.B1 para.1(1) · see it in the full Act

“administrator” has the meaning given by paragraph 1 and, where the context requires, includes a reference to a former administrator,

Defined in Sch.B1 para.111(1) · see it in the full Act
the company

2 Section 233B does not apply in relation to a contract for the supply of goods or services to a company (“the company”) where any of paragraphs 3 to 11 applies.

Defined in Sch.4ZZA para.2 · see it in the full Act
company

(1A) In this Schedule, “company” means—

(a)a company registered under the Companies Act 2006 in England and Wales or Scotland,

(b)a company incorporated in an EEA State ..., or

(c)a company not incorporated in an EEA State but having its centre of main interests in a member State (other than Denmark) or in the United Kingdom .

Defined in Sch.B1 para.111(1A) · see it in the full Act

Cases considering Schedule B1, paragraph 52 13

Orthios Eco Parks (Anglesey) Limited, Re

[2024] EWHC 3047 (Ch) · 28 November 2024

Applies the insufficient-property statement to explain why unsecured creditors’ approval is unnecessary where any distribution would be only from the prescribed part. (see paras [40]; [60])

Fitzroy Street Capital Inc & Anor v Lee Antony Manning & Anor

[2022] EWHC 1495 (Ch) · 20 June 2022Defines

Identifies one statutory exception to the creditors’ meeting requirement where the company has sufficient property to pay each creditor in full. That exception was not the basis relied on in this case. (see paras [117], [230]-[231]) Applies the exception permitting no creditors’ meeting where the administrators think that unsecured creditors will receive no distribution other than through the prescribed part. The administrators’ conclusion was honestly and rationally formed, so the meeting was unnecessary. (see paras [230]-[241]) Identifies the further exception where neither of the objectives in paragraph 3(1)(a) and (b) can be achieved. The judgment referred to it as part of the statutory alternatives but did not base the result on it. (see para. [230])

Holgate & Anor v Reid & Anor

[2013] EWHC 4630 (Ch) · 20 February 2013

Considers the statutory mechanism for dispensing with an initial meeting where the administrator believes there will be no distribution to unsecured creditors beyond the prescribed part. The administrators genuinely held that belief when formulating their proposals (see paras [6]; [16]; [37]). Applies the condition concerning the administrator’s belief that unsecured creditors will receive no distribution other than from the prescribed part. The condition supported deemed approval of the proposals (see paras [6]; [16]; [37]). Applies the provision allowing creditors to requisition an initial meeting. The applicants’ failure to pursue their requisition did not make deemed approval improper (see paras [6]; [38]).

What each judgment says about Schedule B1, paragraph 52 is in the case-law panel in the full Act.

Amendments and notes

3 notes from legislation.gov.uk

Amendments

  1. F1313Words in Sch. B1 para. 52(2) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 10(6); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)
  2. F1314Sch. B1 para. 52(3) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 10(7); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications

  1. C1391Sch. B1 para. 50-58 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3 (as amended (13.3.2018) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2018 (S.I. 2018/208), regs. 1(3), 5(5))