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  • PART 2: PART 2: Administration

    • Section 1: Section 1: Purpose of Administration

      • Article 6 - Administrators

        A person may be appointed as Administrator of a Company:

        (A) by Administration Order of the QFC Court under Article 8;
        (B) by a Secured Creditor under Article 20; or
        (C) by the Company or its directors under Article 23.

      • Article 7 - Purposes of administration

        (1) The Administrator of a Company must perform his functions with the objective of:
        (A) rescuing the Company, or the whole or any part of its undertaking, as a going concern;
        (B) achieving a better result for the Company's creditors as a whole than would be likely if the Company were wound up without first being in administration; and
        (C) realising property in order to make a distribution to one or more Secured Creditors.
        (2) Subject to (4), the Administrator of a Company must perform his functions in the interests of the Company's creditors as a whole.
        (3) The Administrator must perform his functions with the objective specified in (1)(A) unless he thinks either:
        (A) that it is not reasonably practicable to achieve that objective; or
        (B) that the objective specified in (1)(B) would achieve a better result for the Company's creditors as a whole.
        (4) The Administrator may perform his functions with the objective specified in (1)(C) only if:
        (A) he thinks that it is not reasonably practicable to achieve either of the objectives specified in (1)(A) and (B); and
        (B) he does not harm the interests of the creditors of the Company as a whole unless it is necessary to do so.
        (5) The Administrator of a Company must perform his functions as quickly and efficiently as is reasonably practicable.

    • Section 2: Section 2: Application for, and making of, the Administration Order

      • Article 8 - Administration Order

        (1) The QFC Court may make an Administration Order in relation to the Company if, and only if, it is satisfied:
        (A) that the Company is or is likely to become unable to pay its debts (within the meaning given to that expression by Article 78; and
        (B) that the making of an order under this Article 8 would be likely to achieve one or more of the purposes set out in Article 7.
        (2) An Administrator of a Company means a person appointed under these Regulations to manage the Company's affairs, business and property.
        (3) The Adminstration Order shall specify the purpose or purposes for which it is made.
        (4) An Adminstration Order shall not be made in relation to a Company after it has gone into Liquidation.

      • Article 9 - Application for order

        (1) An application to the QFC Court for an Adminstration Order shall be by application either by the Company or the directors, or by a creditor or creditors (including any contingent or prospective creditor or creditors), or by the QFC Authority or by all or any of those parties, together or separately.
        (2) On hearing an application the QFC Court may dismiss it, or adjourn the hearing conditionally or unconditionally, or make an interim order or any other order that it thinks fit.

      • Article 10 - Witness statement to support application

        (1) Where it is proposed to apply to the QFC Court for an Adminstration Order to be made in relation to a Company, a witness statement complying with Article 12 below must be prepared, with a view to its being filed in the QFC Court in support of the application.
        (2) A witness statement in support of an application by the Company or the directors must be made by one of the directors, or the secretary of the Company.
        (3) A witness statement in support of an application by creditors must be made by one of the creditors acting under the authority of all those applying.
        (4) A witness statement in support of an application by the QFC Authority must be made by a person acting under the authority of the QFC Authority.

      • Article 11 - Independent report on Company's affairs

        (1) There may be prepared, with a view to its being exhibited to the witness statement in support of the application, a report by an independent person to the effect that the appointment of an Administrator for the Company is expedient.
        (2) The report may be by the person proposed as Administrator, or by any other person having adequate knowledge of the Company's affairs, not being a director, secretary, manager, member, or employee of the Company.
        (3) The report shall specify the purposes which, in the opinion of the person preparing it, may be achieved for the Company by the making of an Adminstration Order, being purposes particularly specified in Article 7.

      • Article 12 - Contents of witness statement

        (1) The witness statement shall state:
        (A) the deponent's belief that the Company is, or is likely to become, unable to pay its debts and the grounds of that belief; and
        (B) which of the purposes specified in Article 7 is expected to be achieved by the making of an Adminstration Order.
        (2) There shall in the witness statement be provided a statement of the Company's financial position, specifying (to the best of the deponent's knowledge and belief) its assets and liabilities, including contingent and prospective liabilities.
        (3) Details shall be given of any Security Interest known or believed to be held by creditors of the Company and whether in any case the Security Interest is such as to confer power on the holder to appoint an Administrator.
        (4) If any application has been made for the winding up of the Company, details of it shall be given in the witness statement, so far as within the immediate knowledge of the deponent.
        (5) If there are other matters which, in the opinion of those intending to make the application for an Adminstration Order, will assist the QFC Court in deciding whether to make such an order, those matters (so far as lying within the knowledge or belief of the deponent) shall also be stated.
        (6) If a report has been prepared for the Company under Article 11, that fact shall be stated. If not, an explanation shall be provided why no such report has been prepared.

      • Article 13 - Form of application

        (1) If made by the Company or by the directors, the application shall state the name of the Company and its address for service, which (in the absence of special reasons to the contrary) is that of the Company's registered office.
        (2) If made by a single creditor, the application shall state his name and address for service.
        (3) If the application is made by the directors, it shall state that it is so made under Article 9; but from and after being made it is to be treated for all purposes as the application of the Company.
        (4) If the application is made by two or more creditors, it shall state that it is so made (naming them); but from and after being made it is to be treated for all purposes as the application of one only of them, named in the application as applying on behalf of himself and other creditors. An address for service for that one shall be specified.
        (5) The application shall specify the name and address for service of the person proposed to be appointed as Administrator; and it shall be stated that, to the best of the applicant's knowledge and belief, the person is qualified to act as an insolvency practitioner in relation to the Company.
        (6) There shall be exhibited to the witness statement in support of the application:
        (A) a copy of the application;
        (B) a written consent by the proposed Administrator to accept appointment, if an Administration Order is made; and
        (C) if a report has been prepared under Article 11, a copy of it.

      • Article 14 - Filing of application

        (1) The application and witness statement shall be filed in the QFC Court, with a sufficient number of copies for service and use as provided by Article 15.
        (2) Each of the copies delivered shall have applied to it the seal of the QFC Court and be issued to the applicant; and on each copy there shall be endorsed the date and time of filing.
        (3) The QFC Court shall fix a venue for the hearing of the application and this also shall be endorsed on each copy of the application issued under Article 14(2).
        (4) After the application is filed, it is the duty of the applicant to notify the QFC Court in writing of any winding up application made against the Company, as soon as he becomes aware of it.

      • Article 15 - Service of application

        (1) In the following paragraphs of this Article 15, references to the application are to a copy of the application issued by the QFC Court under Article 14(2) together with the witness statement in support of it and the documents (other than the copy application) exhibited to the witness statement.
        (2) The Application shall be served:
        (A) on any Secured Creditor who may be entitled to appoint an Administrator;
        (B) if there is pending an application for the winding up of the Company, on the applicant;
        (C) on the QFC Authority; and
        (D) on the person proposed as Administrator.
        (3) If the application for the making of an Administration Order is made by creditors of the Company, the application shall be served on the Company.
        (4) Where, after receiving notice that an administration application has been made, a Secured Creditor appoints an Administrator in reliance on Article 20, he shall as soon as reasonably practicable send a copy of the notice of appointment to the person making the administration application and to the QFC Court.

      • Article 16 - Manner in which service to be effected

        (1) Service of the application in accordance with this Article 16 shall be effected by the applicant not less than five days before the date fixed for the hearing.
        (2) Service shall be effected as follows:
        (A) on the Company (subject to Article 16(3)), by delivering the documents to its registered office; and
        (B) on any other person (subject to Article 16(4)), by delivering the documents to his proper address.
        (3) For the purposes of Article 16(2), a person's proper address is any which he has previously notified as his address for service; but if he has not notified any such address, service may be effected by delivery to his usual or last known address.
        (4) Delivery of documents to any place or address may be made by leaving them there.

      • Article 17 - Proof of service

        (1) Service of the application shall be verified by witness statement, specifying the date on which, and the manner in which, service was effected.
        (2) The witness statement, with a sealed copy of the application exhibited to it, shall be filed in the QFC Court forthwith after service, and in any event not less than one day before the hearing of the application.

      • Article 18 - The hearing

        (1) At the hearing of the application, any of the following may appear or be represented:
        (A) the applicant;
        (B) the Company;
        (C) any person who has made an application for the winding up of the Company;
        (D) the QFC Authority;
        (E) any Secured Creditor;
        (F) one or more of the directors of the Company;
        (G) the person proposed for appointment as Administrator; or
        (H) with the leave of the QFC Court, any other person who appears to have an interest justifying his appearance.
        (2) On hearing an application for an Administration Order, the QFC Court may:
        (A) make the Administration Order sought subject to any conditions that the QFC Court considers appropriate;
        (B) dismiss the application;
        (C) adjourn the hearing conditionally or unconditionally;
        (D) make an interim order;
        (E) treat the application as a winding-up petition; or
        (F) make any other order which it thinks appropriate.
        (3) If the QFC Court makes an Administration Order, the costs of the applicant, and of any person appearing whose costs are allowed by the QFC Court, are payable as an expense of the administration.

      • Article 19 - Notice and advertisement of Administration Order

        (1) If the QFC Court makes an Administration Order, it shall forthwith give notice to the person appointed as Administrator.
        (2) As soon as is reasonably practicable after the order is made, the Administrator shall advertise its making once in such newspapers as he thinks most appropriate for ensuring that the order comes to the notice of the Company's creditors, which where appropriate may include newspapers published outside the State.
        (3) The Administrator shall also as soon as is reasonably practicable give notice of the making of the order:
        (A) if there is pending an application for the winding up of the Company, to the applicant (and also to the provisional Liquidator, if any);
        (B) to the QFC Authority;
        (C) to any Secured Creditor; and
        (D) to the CRO.
        (4) Two sealed copies of the order shall be sent by the QFC Court to the Administrator, one of which shall be sent by him to the CRO.

    • Section 3: Section 3: Appointment by Secured Creditor

      • Article 20 - Appointment by Secured Creditor

        (1) A Secured Creditor may appoint an Administrator of the Company provided:
        A) he has given at least two business days' written notice to the holder or holders of a Security Interest with priority over his own (within the meaning of Part 5 of the QFC Security Regulations); and
        (B) the holder(s) of such Security Interest has consented in writing to the making of the appointment.
        (2) An Administrator appointed under this Article has a duty to act in good faith and to take proper care to act in the best interests of all the creditors of the Company whilst seeking to achieve repayment of the debts owed by the Company to the Secured Creditor.

      • Article 21 - Notice of appointment

        (1) A person who appoints an Administrator of a Company under Article 20 shall file with the QFC Court a notice of appointment.
        (2) The notice of appointment must include a declaration by or on behalf of the person who makes the appointment:
        (A) that the person is a Secured Creditor;
        (B) that the Security Interest relied on in making the appointment is (or was) enforceable on the date of the appointment; and
        (C) that the appointment is in accordance with these Regulations.
        (3) The declaration shall be made not more than five business days before the notice of appointment is filed with the QFC Court.
        (4) The notice of appointment must state the name and address for service of the Administrator and must be accompanied by a statement by the Administrator:
        (A) that he consents to the appointment; and
        (B) that in his opinion one or more of the purposes of administration referred to in Article 7 is likely to be achieved.
        (5) For the purpose of a statement under Article 21(4) an Administrator may rely on information supplied by directors of the Company or the Secured Creditor (unless he has reason to doubt its accuracy).
        (6) A person commits a contravention and is liable to a financial penalty if in a declaration under Article 21(2) he makes a statement:
        (A) which is false; and
        (B) which he does not reasonably believe to be true.
        (7) Three copies of the notice of appointment shall be filed with the QFC Court and shall have applied to them the seal of the QFC Court and be endorsed with the date and time of filing.
        (8) The QFC Court shall issue two of the sealed copies of the notice of appointment to the person making the appointment, who shall as soon as reasonably practicable send one of the sealed copies to the Administrator.
        (9) Where, after receiving notice that an administration application has been made, a Secured Creditor appoints an Administrator in reliance on Article 20, he shall as soon as reasonably practicable send a copy of the notice of appointment to the person making the administration application and to the QFC Court.

      • Article 22 - Appointment out of QFC Court business hours

        (1) A notice of appointment under Article 21 or 25 and a notice of intention to appoint under Article 24 may be filed with the QFC Court, notwithstanding that the QFC Court is not open for public business. When the QFC Court is closed (and only when it is closed) a notice of appointment and a notice of intention to appoint may be filed with the QFC Court by faxing that form in accordance with Article 22(4).
        (2) The notice shall be faxed to a designated telephone number of the QFC Court. The QFC Authority shall publish the telephone number of the relevant fax machine on the QFC website and on request to the QFC Authority, make it available in writing.
        (3) The appointor shall ensure that a fax transmission report detailing the time and date of the fax transmission and containing a copy of the first page (in part or in full) of the document faxed is created by the fax machine that is used to fax the form.
        (4) The appointment shall take effect from the date and time of that fax transmission. The appointor shall notify the Administrator, as soon as reasonably practicable, that the notice has been filed.
        (5) The appointor shall deliver three copies of the notice of appointment that was faxed to the designated telephone number, together with the transmission report showing the date and time that the form was faxed to the designated telephone number to the QFC Court on the next day that the QFC Court is open for business.
        (6) The copies of the notice shall be sealed by the QFC Court and shall be endorsed with the date and time when, according to the appointor's fax transmission report, the notice was faxed and the date when the notice and accompanying documents were delivered to the QFC Court.
        (7) The Administrator's appointment shall cease to have effect if the requirements of Article 22(5) are not completed within the time period indicated and, subject to an order of the QFC Court, the Secured Creditor may be liable for any loss suffered by the Company as a result.
        (8) Where any question arises in respect of the date and time that the notice of appointment was filed with the QFC Court it shall be a presumption capable of rebuttal that the date and time shown on the appointor's fax transmission report is the date and time at which the notice was so filed.
        (9) The QFC Court shall issue two of the sealed copies of the notice of appointment to the person making the appointment, who shall, as soon as reasonably practicable, send one of the copies to the Administrator.

    • Section 4: Section 4: Appointment by Company or Directors

      • Article 23 - Appointment of Administrator by a Company or its Directors

        (1) A Company, by Ordinary Resolution, may appoint an Administrator.
        (2) The directors of a Company may appoint an Administrator.
        (3) However, an Administrator may not be appointed under (1) or (2) if:
        (A) a petition for the winding up of the Company has been presented and is not yet disposed of; or
        (B) an application for an Administration Order has been made and is not yet disposed of.

      • Article 24 - Notice of intention to appoint

        (1) A person who proposes to make an appointment under Article 23 shall give at least two Business Days' written notice to any person who is a Secured Creditor and may be entitled to appoint an Administrator of the Company under Article 20.
        (2) A copy of the notice of intention to appoint an Administrator for the purposes of Article 23 must also be given to the Company if the directors are making the appointment.
        (3) A person who gives notice of intention to appoint an Administrator under Article 24(1) shall file with the QFC Court as soon as is reasonably practicable copies of the notice and the declaration referred to in Article 24(6).
        (4) The QFC Court may, at any time from the filing of a notice of intention to appoint under Article 24(3), and with a view to the preservation of the Company's business and assets, appoint an Administrator provisionally and upon such terms as the QFC Court sees fit. The powers of such an Administrator may be limited by the order appointing him.
        (5) The remuneration and any expenses properly incurred by a provisional Administrator shall be a first charge on and paid out of any property arising from the exercise of his functions as provisional Administrator and which is in his custody or under his control at that time.
        (6) The person proposing to appoint an Administrator shall make a declaration:
        (A) that the Company is or is likely to become unable to pay its debts; and
        (B) that the Company is not in Liquidation.
        (7) The declaration shall be made not more than five Business Days before the notice is filed with the QFC Court.
        (8) The notice of intention to appoint shall be accompanied by either a copy of the resolution of the Company to appoint an Administrator (where the Company intends to make the appointment) or a record of the decision of the directors (where the directors intend to make the appointment).

      • Article 25 - Notice of appointment

        (1) At least three copies of the notice of appointment shall be filed with the QFC Court and shall have applied to them the seal of the Tribunal and be endorsed with the date and time of filing.
        (2) The notice of appointment must state the name and address for services of the Administrator and must be accompanied by a statement by the Administrator:
        (A) that he consents to the appointment; and
        (B) that in his opinion one or more of the purposes of administration referred to in Article 7 is likely to be achieved.
        (3) For the purpose of a statement under Article 25(2) an Administrator may rely on information supplied by directors of the Company (unless he has reason to doubt its accuracy).
        (4) The QFC Court shall issue two of the sealed copies of the notice of appointment to the person making the appointment who shall as soon as reasonably practicable send one of the sealed copies to the Administrator.

    • Section 5: Section 5: Effect of Application and Appointment

      • Article 26 - Effect of application: interim moratorium

        (1) During the period beginning either with the making of an application for an Administration Order, or the giving of notice of intention to appoint an Administrator and ending with the making of such an Administration Order, or the dismissal of the application, or the appointment of an Administrator:
        (A) no resolution may be passed or order made for the winding up of the Company;
        (B) no landlord or other person to whom rent is payable may exercise any right of forfeiture by peaceable re-entry in relation to premises let to the Company in respect of a failure by the Company to comply with any term or condition of its tenancy of such premises, except with the leave of the QFC Court and subject to such terms as the QFC Court may impose;
        (C) no steps may be taken to enforce any Security Interest over the Company's property, or to repossess goods in the Company's possession under any hire-purchase agreement, except with the leave of the QFC Court and subject to such terms as the QFC Court may impose; and
        (D) no other proceedings and no execution or other legal process may be commenced or continued, and no distress may be levied, against the Company or its property except with the leave of the QFC Court and subject to such terms as the QFC Court may impose.
        (2) References in this Article 26 and Article 27 to hire-purchase agreements include conditional sale agreements, leasing agreements relating to property other than real property and retention of title agreements.

      • Article 27 - Effect of appointment

        (1) On the appointment of an Administrator any application for the winding up of the Company shall be dismissed, save that such an application will be suspended while the Company is in administration following the appointment of an Administrator by a Secured Creditor.
        (2) During the period when a Company is in administration:
        (A) no resolution may be passed or order made for the winding up of the Company;
        (B) no landlord or other person to whom rent is payable may exercise any right of forfeiture by peaceable re-entry in relation to premises let to the Company in respect of a failure by the Company to comply with any term or condition of its tenancy of such premises, except with the consent of the Administrator or the leave of the QFC Court and subject (where the Tribunal gives leave) to such terms as the QFC Court may impose;
        (C) no other steps may be taken to enforce any security over the Company's property, or to repossess goods in the Company's possession under any hire-purchase agreement, except with the consent of the Administrator or the leave of the QFC Court and subject (where the QFC Court gives leave) to such terms as the QFC Court may impose; and
        (D) no other proceedings and no execution or other legal process may be commenced or continued, and no distress may be levied, against the Company or its property except with the consent of the Administrator or the leave of the QFC Court and subject (where the QFC Court gives leave) to such terms as aforesaid.

      • Article 28 - Notification of administration

        (1) Every business letter, written order for goods or services, invoice, receipt, written demand for payment and similar documentation which, at a time when a Company is in administration, is issued by or on behalf of the Company or the Administrator, being a document on or in which the Company's name appears, shall also contain the Administrator's name and a statement that the affairs, business and property of the Company are being managed by the Administrator.
        (2) If default is made in complying with this Article 28, the Company and any of the following persons who without reasonable excuse authorises or permits the default, namely, the Administrator and any officer of the Company, commit a contravention and is liable to a financial penalty.

      • Article 29 - Joint and concurrent Administrators

        In these Regulations:

        (1) a reference to the appointment of an Administrator includes a reference to the appointment of a number of persons acting as the Administrator of a Company; and
        (2) if more than one person is acting as Administrator, subject to an order of the QFC Court to the contrary, all the functions of Administrator may be exercised by any or all of the persons appointed.

      • Article 30 - Appointment of Administrators

        (1) Where a vacancy occurs in the office of Administrator and the Administrator was appointed:
        (A) by a Secured Creditor, the Secured Creditor may replace the Administrator;
        (B) by the Company or its directors, either the Company or the directors, as the case may be, may replace the Administrator;
        (C) pursuant to an Administration Order, the QFC Court may replace the Administrator:
        (1) on the application of either a Creditors' Committee of the Company or, where more than one person was appointed to act jointly and concurrently as Administrator, any of those persons who remain in office; or
        (2) on the application of the Company, its directors or one or more creditors, if the QFC Court is satisfied that those otherwise entitled to make such application are not taking reasonable steps to do so.

      • Article 31 - General powers

        (1) The Administrator of a Company:
        (A) shall, to the extent required to carry out the purpose(s) of the administration, do all such things as may be necessary for the proper management of the affairs, business and property of the Company; and
        (B) without prejudice to the generality of Article 31(1)(A), has the powers specified in Schedule 1, and any person who fails to comply with a summons or direction of the Administrator referred to in that Schedule commits a contravention and is liable to a financial penalty.
        (2) The Administrator also has power to remove any director of the Company and to appoint any person to be a director of it, whether to fill a vacancy or otherwise.
        (3) The Administrator may apply to the QFC Court for directions in relation to any particular matter arising in connection with the carrying out of his functions.
        (4) Any power conferred on the Company or its officers, whether by these Regulations or the Companies Regulations or any other Regulations or by its articles of association, which could be exercised in such a way as to interfere with the exercise by the Administrator of his powers is not exercisable except with the consent of the Administrator, which may be given either generally or in relation to particular cases.
        (5) In exercising his powers the Administrator is deemed to act as the Company's agent.
        (6) The Administrator shall have the power to disclaim any onerous property as defined in Article 92 and the provisions of that Article shall apply to this Article 31(6) subject to such modifications as the context requires.

      • Article 32 - Power to deal with property subject to a Security Interest, etc.

        (1) Where, on an application by the Administrator, the QFC Court is satisfied that the disposal by the Administrator (with or without other assets) of:
        (A) any property of the Company subject to a Security Interest; or
        (B) any goods in the possession of the Company under a hire-purchase agreement
        would be likely to promote one or more of the purposes of the administration the QFC Court may by order authorise the Administrator to dispose of the property as if it were not subject to the Security Interest or to dispose of the goods as if all rights of the owner under the hire-purchase agreement were invested in the Company.,
        (2) It shall be a condition of an order under Article 32(1) that:
        (A) the net proceeds of the disposal; and
        (B) where those proceeds are less than such amount as may be determined by the QFC Court to be the net amount which would be realised on a sale of the property or goods in the open market by a willing vendor, such sums as may be required to make good the deficiency
        shall be applied towards discharging the sums secured by the Security Interest or payable under the hire-purchase agreement.
        (3) Where a condition imposed in pursuance of Article 32(2) relates to two or more securities, that condition requires the net proceeds of the disposal and, where Article 32(2)(B) applies, the sums mentioned to be applied towards discharging the sums secured by those Security Interests in the order of their priorities.
        (4) A copy of an order under Article 32(1) shall, within 14 days after the making of the order, be sent by the Administrator to the CRO.
        (5) If the Administrator without reasonable excuse fails to comply with Article 32(4), he commits a contravention and is liable to a fine.
        (6) References in this Article 32 to hire-purchase agreements include conditional sale agreements, leasing agreements relating to property other than real property and retention of title agreements.

      • Article 33 - General duties

        (1) The Administrator of a Company shall, on his appointment, take into his custody or under his control all the property to which the Company is or appears to be entitled.
        (2) The Administrator shall manage the affairs, business and property of the Company:
        (A) at any time before proposals have been approved (with or without modifications) under Article 39 below, in accordance with the purposes for which the appointment was made and the directions, if any, given by the QFC Court; and
        (B) at any time after proposals have been so approved, in accordance with those proposals as from time to time revised, whether by him or a predecessor of his.
        (3) The Administrator shall summon a meeting of the Company's creditors if:
        (A) he is requested to do so by one-tenth, in value, of the Company's creditors;
        (B) he is requested to do so by the QFC Authority; or
        (C) he is directed to do so by the QFC Court.
        (4) Article 33(2) and (3) shall not apply to an Administrator appointed under Article 20.

      • Article 34 - Court application by Administrator to discharge administration

        (1) The Administrator of a Company may at any time apply to the QFC Court for and order that the appointment of an Administrator of the Company shall cease to have effect from a specified time.
        (2) The Administrator shall as soon as reasonably practicable make an application under this Article 34:
        (A) if it appears to him that the purpose or each of the purposes of the administration has been sufficiently achieved or is incapable of achievement; or
        (B) if he is required to do so by a meeting of the Company's creditors summoned for the purpose; or
        (C) if he thinks that the Company should not have entered into administration.
        (3) On the hearing of an application under this section, the QFC Court may by order:
        (A) provide for the appointment of the Administrator to cease from a specified time;
        (B) where the Administrator is appointed pursuant to an Administration Order, discharge or vary such order and make such consequential provision as it thinks fit;
        (C) adjourn the hearing conditionally or unconditionally;
        (D) make an interim order; or
        (E) make any other order it thinks fit.
        (4) Where the Administration Order is discharged or varied or an Administrator is otherwise discharged, the Administrator shall, within 14 days after the making of the order effecting the discharge or variation, send a copy of that order to the CRO.
        (5) If the Administrator without reasonable excuse fails to comply with Article 34(4), he commits a contravention and is liable to a financial penalty and, for continued contravention, to a daily default financial penalty.

      • Article 35 - Vacation of office

        (1) The Administrator shall vacate office if:
        (A) he ceases to be qualified to act as an insolvency practitioner in relation to the Company; or
        (B) the administration is discharged.
        (2) Where at any time a person ceases to be Administrator, the following provisions apply.
        (3) His remuneration and any expenses properly incurred by him shall be a first charge on and paid out of any property arising from the exercise of his functions as Administrator and which is in his custody or under his control at that time.
        (4) Any sums payable in respect of debts or liabilities incurred, while he was Administrator, under contracts entered into by him or a predecessor of his in the carrying out of his or the predecessor's functions shall be a first charge on and paid out of any such property as is mentioned in Article 35(3).
        (5) Any sums payable in respect of liabilities incurred during the administration under contracts of employment of employees of the Company shall, to the extent that the liabilities are qualifying liabilities, be a first charge on and paid out of any such property as is mentioned in Article 35(3).

        For this purpose, qualifying liabilities shall not include any liabilities under any contract of employment which the Administrator terminates or takes reasonable steps to terminate within 14 days after his appointment.
        (6) For the purposes of and subject to Article 35(5), a liability under a contract of employment is a qualifying liability if:
        (A) it is a liability to pay a sum by way of wages or salary or contribution to an occupational pension scheme; and
        (B) it is in respect of services rendered wholly or partly after the appointment of the Administrator.
        (7) There shall be disregarded for the purposes of Article 35(5) so much of any qualifying liability as represents payment in respect of services rendered before the appointment of the Administrator.
        (8) For the purposes of Article 35(6) and (7):
        (A) wages or salary payable in respect of a period of holiday or absence from work through sickness or other good cause are deemed to be wages or (as the case may be) salary in respect of services rendered in that period; and
        (B) a sum payable in lieu of holiday is deemed to be wages or (as the case may be) salary in respect of services rendered in the period by reference to which the holiday entitlement arose.

      • Article 36 - Release of Administrator

        (1) A person who has ceased to be the Administrator of a Company has his release with effect from such time and on such terms as the QFC Court may determine.
        (2) Where a person has his release under this section, he is, subject to Article 141A (Misfeasance), with effect from the time specified above, discharged from all liability both in respect of acts or omissions of his in the administration and otherwise in relation to his conduct as Administrator.

    • Section 6: Section 6: Ascertainment and Investigation of Company's Affairs

      • Article 37 - Information to be given by Administrator

        (1) Where an Administrator has been appointed, he shall:
        (A) forthwith send to the Company and publish in an appropriate newspaper or newspapers a notice of his appointment; and
        (B) within 28 days after the making of the order, unless the QFC Court otherwise directs, send such a notice to all creditors of the Company (so far as he is aware of their addresses) or the addresses of their appropriately appointed representatives.
        (2) The Administrator shall also, within 14 days after his appointment, give notice of his appointment to the CRO.

      • Article 38 - Statement of affairs to be submitted to Administrator

        (1) Where an Administrator has been appointed, he shall forthwith require some or all of the persons referred to in Article 38(3) to make out and submit to him a statement in the prescribed form as to the affairs of the Company.
        (2) The statement shall be verified by a statement of truth by the persons required to submit it and shall show:
        (A) particulars of the Company's assets, debts and liabilities;
        (B) the names and addresses of its creditors;
        (C) the Security Interest held by them respectively;
        (D) the dates when the Security Interests were respectively given; and
        (E) such further or other information as may be prescribed.
        (3) The persons referred to in Article 38(1) are:
        (A) those who are or have been officers of the Company;
        (B) those who have taken part in the Company's formation at any time within one year before the date of the Administration Order;
        (C) those who are in the Company's employment or have been in its employment within that year, and are in the Administrator's opinion capable of giving the information required; and
        (D) those who are or have been within that year officers of or in the employment of a body corporate which is, or within that year was, an officer of the Company.
        (4) In this Article "employment" includes employment under a contract for services.
        (5) Where any persons are required under this section to submit a statement of affairs to the Administrator, they shall do so (subject to the next subsection) before the end of the period of 21 days beginning with the day after that on which the prescribed notice of the requirement is given to them by the Administrator.
        (6) The Administrator, if he thinks fit, may:
        (A) at any time release a person from an obligation imposed on him under Article 38
        (1) or (2); or
        (B) either when giving notice under Article 38(5) or subsequently, extend the period so mentioned
        and where the Administrator has refused to exercise a power conferred by this subsection, the QFC Court, if it thinks fit, may exercise it.
        (7) If a person without reasonable excuse fails to comply with any obligation imposed under this section, he commits a contravention and may, subject to an order of the QFC Court, be liable to a financial penalty.

    • Section 7: Section 7: Administrator's Proposals

      • Article 39 - Statement of proposals

        (1) Where an Administrator has been appointed, he shall, within two months (or such longer period as the QFC Court may allow) after the commencement of the administration (being the date on which an Administrator is first appointed to the Company):
        (A) send to the CRO and (so far as he is aware of their addresses) to all creditors a statement of his proposals for achieving the purpose or purposes of the administration; and
        (B) lay a copy of the statement before a meeting of the Company's creditors summoned, for the purpose, on not less than 14 days' notice.
        (2) Article 39(1)(B) shall not apply where the Administrator was appointed by a Secured Creditor under Article 20.
        (3) The Administrator shall also, within two months (or such longer period as the QFC Authority may allow) after his appointment, send a copy of the statement (so far as he is aware of their addresses) to all members of the Company.

      • Article 40 - Consideration of proposals by creditors' meeting

        (1) A meeting of creditors summoned under Article 39 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 Article 41.
        (4) As soon as reasonable practical after the conclusion of the meeting, the Administrator shall report the result of the meeting to the QFC Court and shall give notice of that result to the CRO.
        (5) If a report is given to the QFC Court under Article 40(4) that the meeting has declined to approve the Administrator's proposals (with or without modifications), the QFC Court may:
        (A) provide that the appointment of the Administrator will cease to have effect from a specified time;
        (B) where the Administrator is appointed pursuant to an Administration Order, discharge or vary such order and make such consequential provision as it thinks fit;
        (C) adjourn the hearing conditionally or unconditionally;
        (D) make an interim order; or
        (E) make any other order that it thinks fit, including approving a proposal for winding up the Company which had been suspended pursuant to Article 27(1).
        (6) Where the administration is discharged, the Administrator shall, within 14 days after the making of the order effecting the discharge, send a copy of that order to the CRO.

      • Article 41 - Meeting to consider Administrator's proposals

        (1) Notice of the creditors' meeting to be summoned under Article 39 shall be given to all the creditors of the Company:
        (A) who are identified in the statement of affairs, or are known to the Administrator;
        (B) who had claims against the Company at the date of the Administration Order; and
        (C) of whose address the Administrator is aware.
        (2) Notice of the meeting shall also (unless the QFC Court otherwise directs) be given by advertisement in the newspaper or newspapers in which the appointment of an Administrator was advertised.
        (3) Notice to attend the meeting shall be sent out at the same time to the QFC Authority and any directors or officers of the Company (including persons who have been directors or officers in the past) whose presence at the meeting is, in the Administrator's opinion, required.
        (4) If at the meeting there is not the requisite majority for approval of the Administrator's proposals (with modifications, if any), the chairman may, and shall if a resolution is passed to that effect, adjourn the meeting for not more than 14 days.

      • Article 42 - Approval of substantial revisions

        (1) This section applies where:
        (A) proposals have been approved (with or without modifications) under Article 40; and
        (B) the Administrator proposes to make revisions of those proposals which appear to him substantial.
        (2) The Administrator shall:
        (A) send to all creditors of the Company (so far as he is aware of their addresses) a statement in the prescribed form of his proposed revisions; and
        (B) lay a copy of the statement before a meeting of the Company's creditors summoned, for the purpose, on not less than 14 days' notice
        and he shall not make the proposed revisions unless they are approved by the meeting.
        (3) The Administrator shall also send a copy of the statement (so far as he is aware of their addresses) to all members of the Company.
        (4) The meeting of creditors may approve the proposed revisions with modifications, but shall not do so unless the Administrator consents to each modification.
        (5) Subject as above, the meeting shall be conducted in accordance with Article 41.
        (6) After the conclusion of the meeting, the Administrator shall give notice of the result of the meeting to the CRO.

      • Article 43 - Creditors' Committee

        (1) Where a meeting of creditors summoned under Article 39 has approved the Administrator's proposals (with or without modifications), the meeting may, if it thinks fit, establish a Creditors´ Committee to exercise the functions conferred on it by these Regulations.
        (2) If such a Committee is established, the Committee may assist the Administrator and pass on to him the views of creditors, to which the Administrator must give reasonable consideration.

      • Article 44 - Protection of interests of creditors and members

        (1) At any time when a Company is in administration, the QFC Authority, a creditor or a member of the Company may apply to the QFC Court by application for an order under this Article on the ground:
        (A) that the Company's affairs, business and property are being or have been managed by the Administrator in a manner which is unfairly prejudicial to the interests of its creditors or members generally, or of some part of its creditors or members (including at least himself); or
        (B) that any actual or proposed act or omission of the Administrator is or would be so prejudicial.
        (2) Subject to the Administrator's duty to the Secured Creditor under Article 20(2), Article 44(1) shall not apply when the Administrator has been appointed by a Secured Creditor under Article 20.
        (3) On an application for an order under this section the QFC Court may, subject as follows, make such order as it thinks fit for giving relief in respect of the matters complained of, or adjourn the hearing conditionally or unconditionally, or make an interim order or any other order that it thinks fit.
        (4) An order under this Article 44 shall not prejudice or prevent:
        (A) the implementation of an Arrangement approved under Section 8 of this Part; or
        (B) where the application for the order was made more than 28 days after the approval of any proposals or revised proposals under Article 40 or 42, the implementation of those proposals or revised proposals.
        (5) Subject as above, an order under this Article 44 may in particular:
        (A) regulate the future management by the Administrator of the Company's affairs, business and property;
        (B) require the Administrator to refrain from doing or continuing an act complained of by the applicant, or to do an act which the applicant has complained he has omitted to do;
        (C) require the summoning of a meeting of creditors or members for the purpose of considering such matters as the QFC Court may direct; and
        (D) discharge the Administration Order and make such consequential provision as the QFC Court thinks fit.

      • Article 45 - Statement to be annexed to proposals

        There shall be annexed to the Administrator's proposals, when sent to the CRO under Article 39 and laid before the creditors' meeting to be summoned under that Article, a statement by him showing:

        (1) details relating to his appointment as Administrator, the purposes of the administration, and any subsequent variation of these purposes;
        (2) the names of the directors and secretary of the Company;
        (3) an account of the circumstances giving rise to the administration;
        (4) if a statement of affairs has been submitted, a copy or summary of it, with the Administrator's comments, if any;
        (5) if no statement of affairs has been submitted, details of the financial position of the Company at the latest practicable date (which must, unless the QFC Court otherwise orders, be a date not earlier than that of the start of the administration);
        (6) the manner in which the affairs and business of the Company:
        (A) have, since the date of the Administrator's appointment, been managed and financed; and
        (B) will, if the Administrator's proposals are approved, continue to be managed and financed; and
        (7) such other information (if any) as the Administrator thinks necessary to enable creditors to decide whether or not to vote for the adoption of the proposals.

      • Article 46 - Reports and notices under Articles 40 and 42

        Any report or notice by the Administrator of the result of a creditors' meeting held under Articles 40 or 42 shall have annexed to it details of the proposals which were considered by the meeting and of the revisions and modifications to the proposals which were so considered and include a summary of the matters discussed at the meeting.

      • Article 47 - Notice to creditors

        (1) Within 14 days of the conclusion of a meeting of creditors to consider the Administrator's proposals or revised proposals, the Administrator shall send notice of the result of the meeting (including, where appropriate, details of the proposals as approved) to every creditor who received notice of the meeting and to any other creditor of whom the Administrator has since become aware.
        (2) Within 14 days of the end of every period of six months beginning with the date of approval of the Administrator's proposals or revised proposals, the Administrator shall send to all creditors of the Company a report on the progress of the administration.
        (3) On vacating office the Administrator shall send to creditors a report on the administration up to that time. This does not apply where the administration is immediately followed by the Company going into Liquidation, nor when the Administrator is removed from office by the QFC Court or ceases to be qualified as an insolvency practitioner.

      • Article 48 - Duration and extension of administration

        (1) An Administrator is authorised to act for the period of two years from the date of his appointment. He may extend the period of administration beyond that period only in accordance with this Article.
        (2) On the application of an Administrator the QFC Court may by order extend his term of office for a specified period.
        (3) An Administrator's term of office may be extended for a specified period not exceeding twelve months by consent.
        (4) An order of the QFC Court under Article 48(2):
        (A) may be made in respect of an Administrator whose term of office has already been extended by order or by consent; and
        (B) may be made after the expiry of the period referred to in Article 48(1) or of any subsequent extension.
        (5) Where an order is made under Article 48(2) the Administrator shall as soon as reasonably practicable notify the CRO.
        (6) In Article 48(3), in relation to an Administrator appointed under Article 8 or Article 23, "consent" means consent of:
        (A) each Secured Creditor of the Company; and
        (B) if the Company has unsecured debts, creditors whose debts amount to more than 50% of the Company's unsecured debts, disregarding debts of any creditor who does not respond to an invitation to give or withhold consent.
        (7) In Article 48(3), in relation to an Administrator appointed under Article 20, "consent" means consent of the Secured Creditor.
        (8) An Administrator's term of office may be extended by consent more than once.
        (9) Where an Administrator's term of office is extended by consent he shall as soon as is reasonably practicable:
        (A) file notice of the extension with the QFC Court;
        (B) notify the CRO; and
        (C) notify the QFC Authority.
        (10) Where an Administrator fails to extend his term of office in accordance with this Article, the administration shall continue in force but the Administrator is liable to a fine.

      • Article 49 - Moving from administration to creditors' voluntary Liquidation

        (1) This Article 49 applies where the Administrator of a Company thinks:
        (A) that the total amount which each Secured Creditor of the Company is likely to receive has been paid to him or set aside for him; and
        (B) that a distribution will be made to unsecured creditors of the Company (if there are any).
        (2) The Administrator may summon a meeting of the Company's creditors at which a Resolution For Voluntary Winding Up shall be proposed.
        (3) On the passing of a resolution at the meeting summoned under Article 49 (2):
        (A) the appointment of an Administrator in respect of the Company shall cease to have effect;
        (B) any Administration Order in force shall be discharged; and
        (C) the Company shall be wound up as if a Resolution For Voluntary Winding Up under Article 58 had been passed.
        (4) The Administrator shall send to the CRO a notice that this Article has been complied with.
        (5) When an Administrator sends a notice under Article 49 (4) he shall as soon as is reasonably practicable:
        (A) file a copy of the notice with the QFC Court; and
        (B) send a copy of the notice to each creditor of whose claim and address he is aware.
        (6) The Liquidator for the purposes of the winding up shall be:
        (A) a person nominated by the creditors of the Company in accordance with Article 65; or
        (B) if no person is nominated under Article 49 (6)(A), the Administrator.
        (7) In relation to a winding up pursuant to this Article 49 :
        (A) Article 63 does not apply; and
        (B) any Creditors' Committee which is in existence immediately before the Company ceases to be in administration shall continue in existence after that time as if appointed as a Liquidation Committee.

      • Article 50 - Moving from administration to dissolution

        (1) If the Administrator of a Company thinks that the Company has no further assets capable of realisation and no property which might permit a distribution to its creditors, and further that the dissolution of the Company will not be adverse to the interests of creditors, then he shall send a notice to that effect to the CRO.
        (2) On the delivery to the CRO of a notice in respect of a Company under Article 50(1) the appointment of an Administrator of the Company shall cease to have effect, and any Administration Order in force shall be discharged.
        (3) If an Administrator sends a notice under Article 50(1) he shall as soon as is reasonably practicable:
        (A) file a copy of the notice with the QFC Court; and
        (B) send a copy of the notice to each creditor of whose claim and address he is aware.
        (4) At the end of the period of three months beginning with the date of delivery to the CRO of a notice in respect of a Company under Article 50(1) the Company is deemed to be dissolved.
        (5) The QFC Court may, on the application of any person who appears to the QFC Court to be interested, make an order deferring the date at which the dissolution of the Company is to take effect for such time as the QFC Court thinks fit.

    • Section 8: Section 8: Company Arrangements

      • Article 51 - Company Arrangements

        (1) The Administrator may make a proposal to the Company's creditors for a composition in satisfaction of its debts (an "Arrangement").
        (2) The Administrator must send a copy of a statement of his proposals to the CRO and (so far as he is aware of their addresses) to all members and all creditors of the Company.
        (3) Such statement must contain the following information:
        (A) details relating to his appointment as Administrator, the purposes of the administration, and any subsequent variation of these purposes;
        (B) the names of the directors and secretary of the Company;
        (C) an account of the circumstances giving rise to the Administration;
        (D) if a statement of affairs has been submitted, a copy or summary of it, with the Administrator's comments, if any;
        (E) if no statement of affairs has been submitted, details of the financial position of the Company at the latest practicable date (which must, unless the QFC Court otherwise orders, be a date not earlier than that of the start of the Administration);
        (F) the manner in which the affairs and business of the Company:
        (1) have, since the date of the Administrator's appointment, been managed and financed; and
        (2) will, if the Administrator's proposals are approved, continue to be managed and financed; and
        (G) such other information (if any) as the Administrator thinks necessary to enable creditors to decide whether or not to vote for the adoption of the proposed arrangement.

      • Article 52 - Summoning of meetings

        (1) The Administrator shall summon a meeting of the Company's creditors on not less than 14 days' notice to consider the proposal.
        (2) The persons to be summoned to a creditors' meeting under this Article 52 are every creditor of the Company of whose claim and address the person summoning the meeting is aware.

      • Article 53 - Decisions of meetings

        (1) The meeting summoned under Article 52 shall decide whether to approve the proposed Arrangement (with or without modifications).
        (2) Subject as follows, at the meeting for any resolution to be passed approving any proposal or modification there must be a majority in excess of three quarters in value of the creditors present in person or by proxy and voting on the resolution.
        (3) Any resolution is invalid if those voting against it include more than half in value of the creditors who are not, to the best of the chairman's belief, Connected Persons.
        (4) A meeting so summoned shall not approve any proposal or modification which affects the right of a preferential creditor or a secured creditor of the Company to enforce his rights or his security, except with the concurrence of the creditor concerned.
        (5) The meeting may appoint the Administrator or some other person as Supervisor of the Arrangement. The function of the Supervisor is to implement the Arrangement in accordance with its terms.

      • Article 54 - Effect of approval

        (1) This Article 54 has effect where the meeting summoned under Article 52 approves the Arrangement.
        (2) The approved Arrangement takes effect as if made by the Company at the creditors' meeting, and binds every person as if he were a party to the Arrangement if, in accordance with these Regulations:
        (A) the Administrator had taken all reasonable steps to give notice to that person (whether or not he had received notice); and
        (B) he was entitled to vote at that meeting (whether or not he was present or represented at the meeting).

      • Article 55 - Implementation of proposal

        (1) This Article 55 applies where a decision approving an Arrangement has taken effect under Article 54.
        (2) If any of the Company's creditors or any other person is dissatisfied by any act, omission or decision of the Supervisor, he may apply to the QFC Court; and on the application the QFC Court may:
        (A) confirm, reverse or modify any act or decision of the Supervisor;
        (B) give him directions; or
        (C) make such other order as it thinks fit.
        (3) The Supervisor:
        (A) may apply to the QFC Court for directions in relation to any particular matter arising under the Arrangement; and
        (B) is included among the persons who may apply to the QFC Court for the winding up of the Company.
        (4) The QFC Court may make an order appointing a person who is registered under Part 10 of these Regulations to act as an insolvency practitioner in relation to the Company either in substitution for the existing Supervisor or to fill a vacancy.