Insolvency Act 1986 s.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.

Definitions used in section 24 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

consent

(3) But where the administrator has made a statement under paragraph 52(1)(b) “consent” means—

(a) consent of each secured creditor of the company, or

(b) if the administrator thinks that a distribution may be made to preferential creditors, consent of—

(i) each secured creditor of the company, and

(ii) the preferential creditors of the company.

Defined in Sch.B1 para.108(3) · 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

Cases considering section 24 3

Lune Metal Products Ltd v Getliffe & Ors

[2006] EWCA Civ 1720 · 14 December 2006

The judgment refers to creditor approval of administration proposals under sections 23 and 24, without giving a separate construction of section 24. (see [14])

Transbus International Ltd, Re

[2004] EWHC 932 (Ch) · 27 April 2004Defines

Section 24 was identified as the former provision under which administrators’ proposals could be approved. (see para [8])

1 more judgment, and what each says about section 24, are in the case-law panel in the full Act.