• 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.