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  • PART 5: PART 5: Provisions Relating to Administration, Liquidations and Company Arrangements

    • Section 1: Section 1: Application to Officeholders

      • Article 110 - Scope of this Part

        (1) Unless specifically provided in this Part or elsewhere in these Regulations, or the context otherwise requires, this Part applies to all officeholders.
        (2) For the purposes of this Part, "officeholders" means Administrators, provisional Administrators, Supervisors, provisional Liquidators and Liquidators, and "insolvency proceedings" means Administration, Liquidation and Company Arrangements.

    • Section 2: Section 2: Creditors' and Company Meetings

      • Article 111 - Creditors' meetings generally

        (1) This Article applies to creditors' meetings summoned by the officeholder.
        (2) In fixing the venue for the meeting, the officeholder shall have regard to the convenience of creditors.
        (3) The meeting shall be summoned for commencement between 10.00 and 16.00 hours on a Business Day, unless the QFC Court otherwise directs.
        (4) Notice of the meeting shall be given to the QFC Authority and all creditors who are known to the officeholder and who have claims (including contingent claims) against the Company; and the notice shall specify the purpose of the meeting and contain a statement of the effect of Article 113(1) (entitlement to vote).
        (5) At least 21 days' notice of the meeting shall be given.
        (6) With the notice summoning the meeting there shall be sent out forms of proxy substantially in the form set out in Schedule 2.
        (7) Notice may be given by service on a representative of the creditor, nominated by the creditor.
        (8) Notice shall be deemed to have been received by a creditor where the officeholder has taken all reasonable steps to bring such notice to the creditor's attention.
        (9) If within 30 minutes from the time fixed for commencement of the meeting there is no person present to act as chairman, the meeting shall stand adjourned to the same time and place in the following week or, if that is not a Business Day, to the Business Day immediately following.
        (10) The meeting may from time to time be adjourned, if the chairman thinks fit, but not for more than 14 days from the date on which it was fixed to commence.

      • Article 112 - The chairman at meetings

        (1) At any meeting of creditors summoned by the officeholder, either he shall be chairman, or a person nominated by him in writing to act in his place.
        (2) A person so nominated must be either:
        (A) one who is qualified to act as an insolvency practitioner in relation to the Company; or
        (B) an employee of the officeholder or his firm who is experienced in insolvency matters.

      • Article 113 - Entitlement to vote

        (1) Subject as follows, at a meeting of creditors a person is entitled to vote only if:
        (A) he has given to the officeholder, not later than 12.00 hours on the business day before the day fixed for the meeting, details in writing of the debt which he claims to be due to him from the Company and the claim has been duly admitted under the following provisions of these Regulations; and
        (B) there has been lodged with the officeholder any proxy which he intends to be used on his behalf.
        (2) The chairman of the meeting may allow a creditor to vote, notwithstanding that he has failed to comply with Article 113(1)(A), if satisfied that the failure was due to circumstances beyond the creditor's control.
        (3) The chairman of the meeting may call for any document or other evidence to be produced to him, where he thinks it necessary for the purpose of substantiating the whole or any part of the claim.
        (4) Votes are calculated according to the amount of a creditor's debt as at the date of the appointment of the Administrator, the winding up order or winding up resolution as the case may be, deducting any amounts paid in respect of the debt after that date.
        (5) A creditor shall not vote in respect of a debt for an unliquidated amount, or any debt whose value is not ascertained, except where the chairman puts upon the debt an estimated value for the purpose of entitlement to vote and admits the claim for that purpose.
        (6) No vote shall be cast by virtue of a claim more than once on any resolution put to the meeting.

      • Article 114 - Admission and rejection of claims

        (1) At any creditors' meeting the chairman has power to admit or reject a creditor's claim for the purpose of his entitlement to vote; and the power is exercisable with respect to the whole or any part of the claim.
        (2) If the chairman has put upon the debt an estimated value, the creditor shall be allowed to vote only in respect of that estimated amount.
        (3) The chairman's decision under this Article 114, or in respect of any matter arising under Article 113, is subject to appeal following the meeting to the QFC Court by any creditor.
        (4) If on an appeal the chairman's decision is reversed or varied, or a creditor's vote is declared invalid, the QFC Court may order that another meeting be summoned, or make such other order as it thinks just.
        (5) An application to the QFC Court by way of appeal under this Article against a decision of the chairman must be made not later than 21 days after the date of the meeting.

      • Article 115 - Secured Creditors

        (1) At a meeting of creditors in respect of a Company in administration, a Secured Creditor is entitled to vote in respect of the whole value of his debt, whether or not that debt is secured.
        (2) Subject to Article 115(1), at any other meeting of creditors a Secured Creditor is entitled to vote only in respect of the balance (if any) of his debt after deducting the value of his Security Interest as estimated by him.

      • Article 116 - Retention of title creditors

        For the purpose of entitlement to vote at a creditors' meeting in administration proceedings, a seller of goods to the Company under a retention of title agreement shall deduct from his claim the value, as estimated by him, of any rights arising under that agreement in respect of goods in possession of the Company.

      • Article 117 - Hire-purchase, conditional sale and leasing agreements

        (1) Subject as follows, an owner of goods under a hire-purchase or leasing agreement relating to property other than real property, or a seller of goods under a conditional sale agreement, is entitled to vote in respect of the amount of the debt due and payable to him by the Company as at the date of the Administration Order.
        (2) In calculating the amount of any debt for this purpose, no account shall be taken of any amount attributable to the exercise of any right under the relevant agreement, so far as the right has become exercisable solely by virtue of the presentation of the application for an Administration Order or any matter arising in consequence of that, or of the making of the order.

      • Article 118 - Resolutions and minutes

        (1) Subject to Article 118(2), at a creditors' meeting in respect of a Company in administration or Liquidation, a resolution is passed when a majority (in value) of those present and voting, in person or by proxy, have voted in favour of it.
        (2) Any resolution is invalid if those voting against it include more than half in value of the creditors to whom notice of the meeting was sent and who are not, to the best of the chairman's belief, Connected Persons.

      • Article 119 - Creditors' meetings conducted by correspondence

        A reference in these Regulations to anything done, or required to be done, at, or in connection with, or in consequence of, a creditors' meeting includes a reference to anything done in the course of correspondence.

      • Article 120 - Venue and conduct of Company meetings

        (1) Where the officeholder summons a meeting of members of the Company, he shall fix a venue for it having regard to their convenience.
        (2) The chairman of the meeting shall be the officeholder or a person nominated by him in writing to act in his place.
        (3) A person so nominated must be either:
        (A) one who is qualified to act as an insolvency practitioner in relation to the Company; or
        (B) an employee of the officeholder or his firm who is experienced in insolvency matters.
        (4) If within 30 minutes from the time fixed for commencement of the meeting there is no person present to act as chairman, the meeting stands adjourned to the same time and place in the following week or, if that is not a business day, to the business day immediately following.
        (5) Subject as above, the meeting shall be summoned and conducted as if it were a general meeting of the Company summoned under the Company's articles of association, and in accordance with the applicable provisions of the Companies Regulations.

    • Section 3: Section 3: The Creditors' Committee

      • Article 121 - Constitution of committee

        (1) Where these Regulations provide for a Creditors' Committee to be established, and it is resolved by a creditors' meeting to establish such a committee, the Creditors' Committee shall consist of at least three and not more than five creditors of the Company elected at the meeting. Membership of the Creditors' Committee shall be decided by way of a general vote of those creditors present or represented at the meeting. Each creditor may vote for up to 5 creditor representatives.
        (2) Any creditor of the Company is eligible to be a member of the Creditors' Committee, so long as his claim has not been rejected for the purpose of his entitlement to vote.
        (3) A body corporate may be a member of the Creditors' Committee, but it cannot act as such otherwise than by a representative appointed by it for the purpose.

      • Article 122 - Formalities of establishment

        (1) The Creditors' Committee does not come into being, and accordingly cannot act, until the officeholder has issued a certificate of its due constitution.
        (2) No person may act as a member of the Creditors' Committee unless and until he has agreed to do so.
        (3) The officeholder's certificate of the Creditors' Committee's due constitution shall not be issued unless and until at least three of the persons who are to be members of the committee have agreed to act.
        (4) As and when the others (if any) agree to act, the officeholder shall issue an amended certificate of due constitution of the Creditors' Committee.

      • Article 123 - Functions and meetings of the committee

        (1) The Creditors' Committee shall assist the officeholder in discharging his functions, and act in relation to him in such manner as may be agreed from time to time.
        (2) Subject as follows, meetings of the Creditors' Committee shall be held when and where determined by the officeholder.
        (3) The officeholder shall call a first meeting of the Creditors' Committee not later than three months after its first establishment; and thereafter he shall call a meeting:
        (A) if so requested by a member of the Creditors' Committee or his representative (the meeting then to be held within 21 days of the request being received by the officeholder); and
        (B) for a specified date, if the Creditors' Committee has previously resolved that a meeting be held on that date.
        (4) The officeholder shall give seven days' written notice of the date, time and venue of any meeting to every member of the Creditors' Committee (or his representative designated for that purpose), unless in any case the requirement of notice has been waived by or on behalf of any member. A waiver may be signified either at or before the meeting.

      • Article 124 - The chairman at meetings

        (1) The chairman at any meeting of the Creditors´ Committee shall be the officeholder or a person nominated by him in writing to act.
        (2) A person so nominated must be either:
        (A) one who is qualified to act as an insolvency practitioner in relation to the Company; or
        (B) an employee of the officeholder or his firm who is experienced in insolvency matters.

      • Article 125 - Quorum

        A meeting of the Creditors´ Committee is duly constituted if due notice of it has been given to all the members, and at least two members are present or represented.

      • Article 126 - Committee-members' representatives

        A member of the Creditors´ Committee may, in relation to the business of the Creditors´ Committee, be represented by another person duly authorised by him for that purpose.

      • Article 127 - Resignation

        A member of the Creditors´ Committee may resign by notice in writing delivered to the officeholder.

      • Article 128 - Termination of membership

        (1) Membership of the Creditors' Committee is automatically terminated if the member:
        (A) becomes bankrupt or goes into Liquidation or administration, or compounds or arranges with his creditors;
        (B) at three consecutive meetings of the Creditors' Committee is neither present nor represented (unless at the third of those meetings it is resolved that this Article 128 is not to apply in his case); or
        (C) ceases to be, or is found never to have been, a creditor.
        (2) However, if the cause of termination is the member's bankruptcy, his trustee in bankruptcy replaces him as a member of the Creditors' Committee, and in the case of a corporate member's Liquidation or administration, its Liquidator or Administrator replaces him as a member of the Creditors' Committee.

      • Article 129 - Removal

        A member of the Creditors´ Committee may be removed by resolution at a meeting of creditors, at least 14 days' notice having been given of the intention to move that resolution.

      • Article 130 - Vacancies

        (1) The following applies if there is a vacancy in the membership of the Creditors' Committee.
        (2) The vacancy need not be filled if the officeholder and a majority of the remaining members of the Creditors' Committee so agree, provided that the total number of members does not fall below three.
        (3) Alternatively, a meeting of creditors may be convened to seek further members of the Creditors' Committee and that a nominated creditor be appointed (with his consent) to fill the vacancy.

      • Article 131 - Procedure at meetings

        (1) At any meeting of the Creditors´ Committee, each member of it (whether present himself, or by his representative) has one vote; and a resolution is passed when a majority of the members present or represented have voted in favour of it.
        (2) A member of the Creditors´ Committee shall not attend during the consideration by the committee and shall not vote on any resolution concerning a matter in which he has, directly or indirectly, an interest or duty which is material and which conflicts or may conflict with the interests of the creditors.

      • Article 132 - Resolutions by post

        In accordance with this Article 132, the officeholder may seek to obtain the agreement of members of the Creditors´ Committee to a resolution by sending to every member (or his representative designated for the purpose) a copy of the proposed resolution.

      • Article 133 - Expenses of members

        Subject as follows, the officeholder shall out of the assets of the Company defray any reasonable travelling expenses directly incurred by members of the Creditors´ Committee or their representatives in relation to their attendance at the Creditors´ Committee's meetings, or otherwise on the committee's business, as an expense of the insolvency proceedings.

      • Article 134 - Formal defects

        The acts of the Creditors´ Committee established for any insolvency proceedings are valid notwithstanding any defect in the appointment, election or qualifications of any member of the Creditors´ Committee or any Creditors´ Committee members' representative or in the formalities of its establishment.

    • Section 4: Section 4: The Officeholder

      • Article 135 - Fixing of remuneration

        (1) The officeholder is entitled to receive remuneration for his services as such.
        (2) The remuneration shall be fixed at the first meeting of the Creditors' Committee:
        (A) as a percentage of the value of the property with which he has to deal; or
        (B) by reference to the time properly given by the insolvency practitioner (as officeholder) and his staff in attending to matters arising in the insolvency proceedings; or
        (C) as a set amount.
        (3) It is for the Creditors' Committee (if there is one) to determine whether the remuneration is to be fixed under Article 135(2)(A), (B) or (C) and, if under Article 135(2)(A), to determine any percentage to be applied as there mentioned.
        (4) In arriving at that determination, the Creditors' Committee shall have regard to the following matters:
        (A) the complexity (or otherwise) of the case;
        (B) any respects in which, in connection with the Company's affairs, there falls on the officeholder any responsibility of an exceptional kind or degree;
        (C) the effectiveness with which the officeholder appears to be carrying out, or to have carried out, his duties as such, and
        (D) the value and nature of the property with which he has to deal.
        (5) If no Creditors' Committee is established by the first meeting of creditors, the officeholder's remuneration may be fixed (in accordance with Article 135(2)) by a resolution of that first meeting of creditors; and Article 135}(4) applies to them as it does to the Creditors' Committee.
        (6) If not fixed as above, the officeholder's remuneration shall, on his application, be fixed by the QFC Court.

      • Article 136 - Recourse to meeting of creditors

        If the officeholder's remuneration has been fixed by the Creditors´ Committee, and he considers the rate or amount to be insufficient, he may request that it be increased by resolution of the creditors.

      • Article 137 - Recourse to the QFC Court

        (1) If the officeholder considers that the remuneration fixed for him by the Creditors' Committee, or by resolution of the creditors, is insufficient, or the basis of the officeholder's remuneration is not fixed within 18 months after the date of his appointment, he may apply to the QFC Court for an order fixing or increasing its amount or rate.
        (2) The officeholder shall give at least 14 days' notice of his application to the members of the Creditors' Committee; and the Creditors' Committee may nominate one or more members to appear or be represented, and to be heard, on the application.
        (3) If there is no Creditors' Committee, the officeholder's notice of his application shall be sent to such one or more of the Company's creditors as the QFC Court may direct, which creditors may nominate one or more of their number to appear or be represented.
        (4) The QFC Court may, if it appears to be a proper case, order the costs of the officeholder's application, including the costs of any member of the Creditors' Committee appearing or being represented on it, or any creditor so appearing or being represented, to be paid as an expense of the insolvency proceedings.

      • Article 138 - Creditors' claim that remuneration is excessive

        (1) Any Secured Creditor, or any unsecured creditor with the concurrence of at least 25 per cent in value of the creditors (including himself) or with the permission of the QFC Court, may, at any time before the officeholder's release but not thereafter, apply to the QFC Court for an order that the officeholder's remuneration be reduced, on the grounds that it is, in all the circumstances, excessive.
        (2) The QFC Court may, if it thinks that no sufficient cause is shown for a reduction, dismiss the application; but it shall not do so unless the applicant has had an opportunity to attend the QFC Court for an ex parte hearing, of which he has been given at least seven days' notice.
        (3) If the application is not dismissed under Article 138(2), the QFC Court shall fix a venue for it to be heard, and give notice to the applicant accordingly.
        (4) The applicant shall, at least 14 days before the hearing, send to the officeholder a notice stating the venue accompanied by a copy of the application, and any evidence which the applicant intends to adduce in support of it.
        (5) If the QFC Court considers the application to be well-founded, it shall make an order fixing the remuneration at a reduced amount or rate.
        (6) Unless the QFC Court orders otherwise, the costs of the application shall be paid by the applicant, and are not payable as an expense of the insolvency proceedings.

      • Article 139 - Abstract of receipts and payments

        (1) The officeholder shall:
        (A) within two months after the end of six months from the date of his appointment, and of every subsequent period of six months; and
        (B) within two months after he ceases to act as officeholder
        send to the QFC Court, and to the CRO, and to each member of the Creditors' Committee, the requisite accounts of the receipts and payments of the Company.
        (2) The accounts are to be in the form of an abstract showing:
        (A) receipts and payments during the relevant period of six months; or
        (B) where the officeholder has ceased to act, receipts and payments during the period from the end of the last six month period to the time when he so ceased (alternatively, if there has been no previous abstract, receipts and payments in the period since his appointment as officeholder).

      • Article 140 - Resignation

        (1) The officeholder may give notice of his resignation on grounds of ill health or because:
        (A) he intends ceasing to be in practice as an insolvency practitioner or to be registered as an insolvency practitioner under these Regulations; or
        (B) there is some conflict of interest, or change of personal circumstances, which precludes or makes impracticable the further discharge by him of his duties as officeholder.
        (2) The officeholder may, with the leave of the QFC Court, give notice of his resignation on grounds other than those specified in Article 140(1).
        (3) The officeholder must give to the persons specified below at least seven days' notice of his intention to resign, or to apply for the QFC Court's leave to do so:
        (A) if there is a continuing officeholder of the Company, to him;
        (B) if there is no such officeholder, to the Creditors' Committee; and
        (C) if there is no such officeholder and no Creditors' Committee, to the Company and its creditors.

      • Article 141 - Officeholder deceased

        (1) Subject as follows, where the officeholder has died, it is the duty of his personal representatives to give notice of the fact to the QFC Court, specifying the date of the death. This does not apply if notice has been given under Article 141(2) or (3).
        (2) If the deceased officeholder was a partner in a firm, notice may be given by a partner in the firm who is qualified to act as an insolvency practitioner (whether or not registered as such under these Regulations)
        (3) Notice of the death may be given by any person producing to the QFC Court the relevant death certificate or a copy of it and a duly authenticated translation into English if the original is not written in English.

      • Article 141A - Misfeasance

        (1) The QFC Court may examine the conduct of a person who:
        (A) is or purports to be the officeholder in respect of a Company; or
        (B) has been or has purported to be the officeholder in respect of a Company.
        (2) An examination under this paragraph may be held only on the application of:
        (A) the QFC Authority;
        (B) the Regulatory Authority;
        (C) the Administrator of the Company;
        (D) the Liquidator of the Company;
        (E) a creditor of the Company; or
        (F) a member of the Company.
        (3) An application under (2) must allege that the officeholder:
        (A) has misapplied or retained money or other property of the Company;
        (B) has become accountable for money or other property of the Company;
        (C) has breached a fiduciary or other duty in relation to the Company;
        (D) has been guilty of misfeasance; or
        (E) has otherwise failed to discharge the duties of his office.
        (4) On an examination under this paragraph into a person's conduct the QFC Court may:
        (A) impose a fine or other penalty on the office holder;
        (B) terminate any appointments of the officeholder;
        (C) order the officeholder:
        (i) to repay, restore or account for money or property;
        (ii) to pay interest;
        (iii) to contribute a sum to the Company's property by way of compensation for breach of duty or misfeasance.

    • Section 5: Section 5: Antecedent Transactions

      • Article 142 - Transactions at an undervalue

        (1) Where the Company has at a relevant time (defined in Article 144) entered into a transaction with any person at an undervalue, the QFC Court may, on application of the officeholder, make an order restoring the position to what it would have been if the Company had not entered into that transaction.
        (2) A Company enters into a transaction with a person at an undervalue if it makes a gift to that person or otherwise enters into a transaction with that person on terms that provide for the Company to receive no consideration, or consideration the value of which, in money or money's worth, is significantly less than the value, in money or money's worth, of the consideration provided by the Company.
        (3) The QFC Court shall not make an order under this Article 142 in respect of a transaction at an undervalue if it is satisfied:
        (A) that the Company which entered into the transaction did so in good faith and for the purpose of carrying on its business; and
        (B) that at the time it did so there were reasonable grounds for believing that the transaction would benefit the Company.

      • Article 143 - Preferences

        (1) Where the Company has at a relevant time (defined in Article 144) given a preference to any person, the QFC Court may, on application of an officeholder, make an order restoring the position to what it would have been if the Company had not given that preference.
        (2) For the purposes of this Article 143 a Company gives a preference to a person if:
        (A) that person is one of the Company's creditors or a surety or guarantor for any of the Company's debts or other liabilities; and
        (B) the Company does anything or suffers anything to be done which (in either case) has the effect of putting that person into a position which, in the event of the Company going into insolvent Liquidation, will be better than the position he would have been in if that thing had not been done.
        (3) The QFC Court shall not make an order under this Article 143 in respect of a preference given to any person unless the Company which gave the preference was influenced in deciding to give it by a desire to produce in relation to that person the effect mentioned in Article 143(2)(B).
        (4) A Company which has given a preference to a Connected Person (otherwise than by reason only of being its employee) at the time the preference was given is presumed, unless the contrary is shown, to have been influenced in deciding to give it by such a desire as is mentioned in Article 143(3).

      • Article 144 - Relevant time under Articles 142 and 143

        The time at which a Company enters into a transaction at an undervalue or gives a preference is a relevant time if the transaction is entered into, or the preference given:

        (1) in the case of a transaction at an undervalue which is entered into with, or of a preference which is given to, a Connected Person (otherwise than by reason only of being his employee), at a time in the period of two years ending with the commencement of Liquidation or administration; and
        (2) in the case of any other transaction at an undervalue or preference at a time in the period of six months ending with the commencement of Liquidation or administration.

      • Article 145 - Invalid security interests

        (1) Where a Company goes into administration or insolvent Liquidation, a Security Interest in all or substantially all of the Company's property is invalid where:
        (A) the Security Interest is created in favour of a Connected Person and was created after a date two years prior to the commencement of administration or Liquidation; or
        (B) the Security Interest is created after a date one year prior to the commencement of administration or Liquidation and the Company either was at the date of the creation or became pursuant to the transaction in respect of which the Security Interest was created unable to pay its debts as they fell due.
        (2) Article 145(1) does not invalidate a Security Interest to the extent of the value transferred to the Company or liabilities of the Company released as a result of the transaction giving rise to the grant of the Security Interest.

    • Section 6: Section 6: Cooperation with Officeholder

      • Article 146 - Getting in the Company's property

        (1) Where any person has in his possession or control any property, books, papers or records to which the Company appears to be entitled, the QFC Court may, on application by an officeholder, require that person forthwith (or within such period as the QFC Court may direct) to pay, deliver, convey, surrender or transfer the property, books, papers or records to the officeholder.
        (2) Where the officeholder:
        (A) seizes or disposes of any property which is not property of the Company; and
        (B) at the time of seizure or disposal believes, and has reasonable grounds for believing, that he is entitled (whether in pursuance of an order of the QFC Court or otherwise) to seize or dispose of that property
        the officeholder is not liable to any person in respect of any loss or damage resulting from the seizure or disposal (except in so far as that loss or damage is caused by the officeholder's own negligence), and has a lien on the property, or the proceeds of its sale, for such expenses as were incurred in connection with the seizure or disposal.

      • Article 147 - Duty to co-operate with officeholder

        (1) Each of the persons mentioned in Article 147(2) shall:
        (A) give to the officeholder such information concerning the Company and its promotion, formation, business, dealings, affairs or property as the officeholder may reasonably require;
        (B) produce to the officeholder any books, papers or records in his possession relating to the Company or to any such dealings; and
        (C) attend on the officeholder at such times as the latter may reasonably require.
        (2) The persons referred to in Article 147(1) are:
        (A) those who are or have at any time been officers of the Company;
        (B) those who have taken part in the formation of the Company at any time within one year before the effective date;
        (C) those who are in the employment of the Company, or have been in its employment (including employment under a contract for services) within that year, and are in the officeholder's opinion capable of giving information which he requires;
        (D) those who are, or have within that year been, officers of, or in the employment (including employment under a contract for services) of, another body corporate which is, or within that year was, an officer of the Company in question; and
        (E) in the case of a Company being wound up by the QFC Court, any person who has acted as provisional Liquidator or Liquidator of the Company.
        (3) Where a person to whom this Article applies fails to comply with its provisions, that person commits a contravention and shall be liable to a financial penalty.

      • Article 147A - Inquiry into Company's dealings

        (1) The QFC Court may on application of the office holder, summon to appear before it:
        (A) any officer of the Company;
        (B) any person known or suspected to have in his possession any property of the company or supposed to be indebted to the Company; or
        (C) any person whom the office holder thinks capable of giving information concerning the promotion, formation, business, dealings, affairs or property of the Company.
        (2) The QFC Court may require any such person as is mentioned in subsection (A) to (C) to submit to the QFC Court an account of his dealings with the Company or produce any books, papers or other records in his possession or under his control relating to the Company.

    • Section 7: Section 7: Miscellaneous

      • Article 148 - Preferential Debts

        A reference in these Regulations to the preferential debts of a Company is to the debts listed in this Article 148, and references to preferential creditors are to be read accordingly:

        (1) so much of any amount which is owed by the Company to a person who is or has been an employee of the Company by way of remuneration, which shall include any notice period not exceeding three months as does not exceed the sum of US$50,000;
        (2) so much of any amount which is owed by the Company to a person who is or has been an employee of the Company by way of reasonable accrued holiday remuneration and reasonable contributions to occupational pension schemes; and
        (3) taxes, financial penalties and fees owed by the Company to the State, the QFC Authority, the Regulatory Authority and the CRO.

      • Article 149 - QFC Court rules and practice to apply

        (1) The rules, practice and procedure of the QFC Court apply to the conduct of any proceedings under these Regulations, except so far as inconsistent with these Regulations.
        (2) An application to the QFC Court shall be accompanied by the appropriate QFC Court fee to be prescribed by the QFC Court.
        (3) No proceedings or procedures under these Regulations or acts of an individual appointed as Liquidator, provisional Liquidator, Administrator, provisional Administrator or Supervisor shall be invalidated by any formal defect or by any irregularity in such proceeding, procedure or appointment, unless the QFC Court considers that substantial injustice has been caused by the defect or irregularity, and that the injustice cannot be remedied by any order of the QFC Court.

    • Section 8: Section 8: Proof of Debts

      • Article 149A - Proving a debt

        (1) A person claiming to be a creditor of a Company and wishing to recover his debt in whole or in part must (subject to any order of the QFC Court to the contrary) submit his claim in writing to the officeholder.
        (2) A creditor is referred to as "proving" for his debt and a document by which he seeks to establish his claim is his "proof".
        (3) A proof must:
        (A) be made out by, or under the direction of, the creditor and be authenticated by him or a person authorised on his behalf; and
        (B) state the following matters;
        (i) the creditor's name and address;
        (ii) the total amount of the creditor's claim as at the date on which the Company entered into administration or Liquidation as the case may be, less any payments made after that date in respect of the claim and any adjustment by way of set-off in accordance with Article 107;
        (C) whether or not the claim includes outstanding uncapitalised interest;
        (D) particulars of how and when the debt was incurred by the Company;
        (E) particulars of any Security Interest held, the date on which it was given and the value which the creditor puts on it;
        (F) details of any reservation of title in respect of any goods to which the debt refers; and
        (G) the name, address and authority of the person authenticating the proof (if other than the creditor himself).
        (4) There shall be specified in the proof details of any documents by reference to which the debt can be substantiated, but it is not essential that such document be attached to the proof or submitted with it.
        (5) The officeholder may call for any document or other evidence to be produced to him, where he thinks it necessary for the purpose of substantiating the whole or any part of the claim made in the proof.
        (6) Where an administration is immediately preceded by a winding up, or vice versa, a creditor providing in one is deemed to have proved in the other.

      • Article 149B - Cost of proving

        Unless the QFC Court provides otherwise:

        (1) a creditor bears the cost of proving his own debt, including the costs incurred in providing documents or evidence substantiating the claim made in the proof; and
        (2) costs incurred by the officeholder in estimating the quantum of a debt not bearing a certain value are payable as an expense of the liquidation.

      • Article 149C - Officeholder to allow inspections of proofs

        An officeholder must, so long as proofs lodged with him are in his hands, allow them to be inspected, at all reasonable times on a business day, by any of the following persons:

        (1) any creditor who has submitted his proof of debt;
        (2) any contributory of the Company; or
        (3) any person acting on behalf of either of the above.

      • Article 149D - Admission and rejection of proofs for dividend

        (1) A proof may be admitted for dividend either for the whole amount claimed by the creditor, or for part of that amount.
        (2) If the officeholder rejects a proof in whole or in part, he shall prepare a written statement of his reasons for doing so, and send it as soon as reasonably practicable to the creditor.

      • Article 149E - Appeal against decision on proof

        (1) If a creditor is dissatisfied with the officeholder's decision with respect to his proof (including any decision on the question of preference), he may apply to the QFC Court for the decision to be reversed or varied.
        (2) An application under (1) must be made within 21 days of his receiving the statement sent under Article 149D(2).
        (3) A contributory (in the case of a winding up), a member (in the case of an administration) or, in either case, a member may, if dissatisfied with the officeholder's decision admitting or rejecting the whole or any part of a proof, make such an application within 21 days of becoming aware of the officeholder's decision.
        (4) Where application is made to the QFC Court under this Article, the QFC Court shall fix a venue for the application to be heard, notice of which shall be sent by the applicant to the creditor who lodged the proof in question (if it is not himself) and the officeholder.
        (5) The officeholder shall, on receipt of the notice, file with the QFC Court the relevant proof, together (if appropriate) with a copy of the statement sent under Article 149D(2).
        (6) Where the application is made by a member or contributory, the QFC Court must not disallow the proof (in whole or in part) unless the Member or contributory shows that there is (or would be but for the amount claimed in the proof), or that it is likely that there will be (or would be but for the amount claimed in the proof), a surplus of assets to which the Company would be entitled.
        (7) After the application has been heard and determined, the proof shall, unless it has been wholly disallowed, be returned by the QFC Court to the officeholder.
        (8) The officeholder is not personally liable for costs incurred by any person in respect of the application under this Article unless the QFC Court otherwise orders.

      • Article 149F - Withdrawal or variation of proof

        A creditor's proof may at any time, by agreement between himself and the officeholder, be withdrawn or varied as to the amount claimed.

      • Article 149G - Expunging of proof by the QFC Court

        (1) The QFC Court may expunge a proof or reduce the amount claimed:
        (A) on the officeholder's application, where he thinks that the proof has been improperly admitted, or ought to be reduced; or
        (B) on the application of a creditor, if the officeholder declines to interfere in the matter.
        (2) Where application is made to the QFC Court under this Article, the QFC Court shall fix a venue for the application to be heard, notice of which shall be sent by the applicant:
        (A) in the case of an application by the officeholder, to the creditor who made the proof; and
        (B) in the case of an application by a creditor, to the officeholder and to the creditor who made the proof (if not himself).

    • Section 9: Section 9: Declaration and Payment of Dividends

      • Article 149H - Notice of proposed dividend

        (1) Before declaring a dividend, an officeholder must give notice of his intention to do so to all creditors whose addresses are known to him and who have not proved their debts.
        (2) Such notice must:
        (A) specify a date, not less than 21 days from the date of that notice, up to which proofs may be lodged;
        (B) specify whether the proposed dividend is interim or final; and
        (C) state that it is the intention of the officeholder to declare a dividend within the period of two months from the date specified under (B).

      • Article 149I - Declaration of dividend

        (1) Subject to (2), within the two month period stated in Article 149H(2)(C), the officeholder shall proceed to declare the dividend to one or more classes of creditor of which he gave notice.
        (2) Except with the permission of the QFC Court, the officeholder shall not declare a dividend so long as there is pending any application to the QFC Court to reverse or vary a decision of his on a proof, or to expunge a proof or to reduce the amount claimed.
        (3) If the QFC Court gives permission under (2), the officeholder must make such provision in respect of the proof in question as the QFC Court directs.

      • Article 149J - Notice of declaration of a dividend

        (1) Where an officeholder declares a dividend he shall give notice of that fact to all creditors who have proved their debts.
        (2) The notice shall include the following particulars relating to the administration or Liquidation as appropriate:
        (A) amounts raised from the sale of assets, indicating (so far as practicable) amounts raised by the sale of particular assets;
        (B) payments made by the officeholder when acting as such;
        (C) where the officeholder proposed to make a distribution to unsecured creditors, the value of the prescribed part;
        (D) provision (if any) made for unsettled claims, and funds (if any) retained for particular purposes;
        (E) the total amount of dividend and the rate of dividend; or
        (F) whether, and if so when, any further dividend is expected to be declared.

      • Article 149K - Payment of dividend

        (1) The dividend may be distributed simultaneously with the notice declaring it.
        (2) Payment of dividend may be made by post, or arrangements may be made with any creditor for it to be paid to him in another way, or held for his collection.
        (3) Where a dividend is paid on a bill of exchange or other negotiable instrument, the amount of the dividend shall be endorsed on the instrument, or on a certified copy of it, if required to be produced by the holder for that purpose.

      • Article 149L - Notice of no, or no further, dividend

        If the officeholder gives notice to creditors that he is unable to declare any dividend or (as the case may be) any further dividend, the notice shall contain a statement to the effect either:

        (A) that no funds have been realised; or
        (B) that the funds realised have already been distributed or used or allocated for defraying the expenses of administration or Liquidation as the case may be.