Insolvency Act 1986 s.276 – Default in connection with voluntary arrangement

(1)The court shall not make a bankruptcy order on a petition under section 264(1)(c) (supervisor of, or person bound by, voluntary arrangement proposed and approved) unless it is satisfied—

(a)that the debtor has failed to comply with his obligations under the voluntary arrangement, or

(b)that information which was false or misleading in any material particular or which contained material omissions—

(i)was contained in any statement of affairs or other document supplied by the debtor under Part VIII to any person, or

(ii)was otherwise made available by the debtor to his creditors [^F677in connection with a creditors' decision procedure instigated^F677] under that Part, or

(c)that the debtor has failed to do all such things as may for the purposes of the voluntary arrangement have been reasonably required of him by the supervisor of the arrangement.

(2)Where a bankruptcy order is made on a petition under section 264(1)(c), any expenses properly incurred as expenses of the administration of the voluntary arrangement in question shall be a first charge on the bankrupt’s estate.

Definitions used in section 276 1

the debtor: (2) In Schedule 6 “the debtor” means the company or the individual concerned.
Defined in s.386(2) · see it in the full Act

Cases considering section 276 13

In re NT Gallagher & Son Ltd (Shierson v Tomlinson, NT Gallagher & Sons Ltd v Howard)

[2002] EWCA Civ 404 · 26 March 2002Limits

The subsection gives properly incurred arrangement expenses a first charge where bankruptcy follows a petition under section 264(1)(c). It does not establish that an individual voluntary arrangement trust terminates upon bankruptcy.

Gertner & Anor v CFL Finance Ltd

[2020] EWHC 1241 (Ch) · 22 May 2020Interprets

Identified as permitting a bankruptcy order where a debtor fails to comply with obligations under a voluntary arrangement (see paras [33], [36]-[38]). Used to explain the statutory transparency obligation concerning false, misleading or materially incomplete information supplied in connection with a voluntary arrangement (see paras [33], [37]-[38], [94]). Identified as addressing a debtor’s failure to do things reasonably required by the supervisor of a voluntary arrangement (see para [33]).

CFL Finance Ltd v Rubin & Anor (As Joint Supervisors of Moises Gertner's Voluntary Arrangement)

[2017] EWHC 111 (Ch) · 27 January 2017

The court confirmed that materially false or misleading information or material omissions may support a bankruptcy order notwithstanding an IVA. (see paras [78]-[80], [87], [93])

Kapoor v National Westminster Bank Plc & Anor[2011] EWCA Civ 1083 · 5 October 2011
Demarco v Perkins[2006] EWCA Civ 188 · 23 January 2006
Whitehead v Household Mortgage Corpn plc[2002] EWCA Civ 1657 · 14 November 2002
Scio-Fund Sicav-Fis & Anor v Mohammed Reza Aslam Merchant & Anor[2026] EWHC 815 (Ch) · 16 April 2026
MOHAMMAD RAZI KHAN v ARVINDER SINGH-SALL & Anor[2022] EWHC 1913 (Ch) · 21 July 2022
CFL Finance Ltd v Bass & Ors (Good faith to voluntary arrangements : consumer credit law)[2019] EWHC 1839 (Ch) · 15 July 2019
Fehily & Anor v Atkinson & Anor[2016] EWHC 3069 (Ch) · 1 December 2016
National Westminster Bank Plc v Kapoor & Anor[2011] EWHC 255 (Ch) · 20 January 2011

2 more judgments, and what each says about section 276, are in the case-law panel in the full Act.

Amendments and notes

2 notes from legislation.gov.uk

Amendments

F677Words in s. 276(1)(b)(ii) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 73; 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)

Modifications

C960S.276(2) applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II