Insolvency Act 1986, Schedule B1, paragraph 65

SCHEDULE B1 ADMINISTRATION

65 [F1340 (1) If the assets of a company are sufficient to meet any debts or other liabilities payable under paragraph 64A in full, the administrator of the company may make a distribution to any other creditor of the company.F1340]

(2) [F1341 Sections 175 and 176AZAF1341] shall apply in relation to a distribution under this paragraph as [F1342 they applyF1342] in relation to a winding up.

(3) A payment may not be made by way of distribution under this paragraph to a creditor of the company who is neither secured nor preferential [F1343 unless—

(a) the distribution is made by virtue of section 176A(2)(a), or

(b)F1343] the court gives permission.

Definitions used in Schedule B1, paragraph 65 3

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
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

Cases considering Schedule B1, paragraph 65 30

In the matter of the Nortel Companies

[2013] UKSC 52 · 24 July 2013Limits

Together with the other listed provisions, the paragraph contributes to the statutory order for distributing assets in administration. (see para [39]) Court sanction for payment to an unsecured, non-preferential creditor is directed to payments furthering statutory administration purposes. It gives no general power to rearrange priorities. (see para [120])

Cross Transport Ltd (In Administration), Re

[2026] EWHC 1636 (Ch) · 30 June 2026

Applied to explain the post-2020 ability of an administration to make distributions to creditors without necessarily moving into liquidation. (see paras [17]; [19]-[20])

Mannarest Ltd, Re

[2026] EWHC 326 (Ch) · 18 February 2026

The court applied paragraph 65 to the proposed distributions and held that permission was required because the intended recipients were neither secured nor preferential creditors. (See paras [14], [20].)

10 more judgments, and what each says about Schedule B1, paragraph 65, are in the case-law panel in the full Act.

Amendments and notes

10 notes from legislation.gov.uk

Amendments

  1. F1340Sch. B1 para. 65(1) substituted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 31(4) (with ss. 2(2), 5(2))
  2. F1341Words in Sch. B1 para. 65(2) substituted (19.12.2018) by The Banks and Building Societies (Priorities on Insolvency) Order 2018 (S.I. 2018/1244), arts. 1(2), 13(2)(a) (with art. 3)
  3. F1342Words in Sch. B1 para. 65(2) substituted (19.12.2018) by The Banks and Building Societies (Priorities on Insolvency) Order 2018 (S.I. 2018/1244), arts. 1(2), 13(2)(b) (with art. 3)
  4. F1343Words in Sch. B1 para. 65(3) substituted (26.5.2015) by Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 128(2), 164(3)(i)(ii)

Modifications

  1. C1408Sch. B1 paras. 59-68 modified (5.7.2018) by Housing and Planning Act 2016 (c. 22), s. 216(3), Sch. 5 Pts. 1, 2; S.I. 2018/805, reg. 3(b)
  2. C1410Sch. B1 paras. 59-75 applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1), 19-25 (with reg. 64)
  3. C1425Sch. B1 para. 65 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
  4. C1426Sch. B1 para. 65 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37, Sch. 2 paras. 4-6 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)
  5. C1427Sch. B1 para. 65(1) restricted (6.3.2008) by The Regulated Covered Bonds Regulations 2008 (S.I. 2008/346), reg. 46, Sch. para. 2(5)
  6. C1428Sch. B1 para. 65(2) applied by The Financial Market and Insolvency (Settlement Finality) Regulations 1999 (S.I. 1999/2979), reg. 14(5)(a)(i) (as substituted (1.10.2009) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2009 (S.I. 2009/1972), reg. 4(d)(ii))