Q&As

Do the qualifying decision procedures and deemed consent procedure in sections 246ZE–246ZF of the Insolvency Act 1986 (IA 1986) apply in members’ voluntary liquidations? IA 1986, s 91 provides that the liquidator should be appointed at a meeting of members, but once appointed would IA 1986, ss 246ZE–246ZF apply?

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Published on LexisPSL on 15/06/2021

The following Restructuring & Insolvency Q&A provides comprehensive and up to date legal information covering:

  • Do the qualifying decision procedures and deemed consent procedure in sections 246ZE–246ZF of the Insolvency Act 1986 (IA 1986) apply in members’ voluntary liquidations? IA 1986, s 91 provides that the liquidator should be appointed at a meeting of members, but once appointed would IA 1986, ss 246ZE–246ZF apply?

Do the qualifying decision procedures and deemed consent procedure in sections 246ZE–246ZF of the Insolvency Act 1986 (IA 1986) apply in members’ voluntary liquidations? IA 1986, s 91 provides that the liquidator should be appointed at a meeting of members, but once appointed would IA 1986, ss 246ZE–246ZF apply?

Sections 246ZE and 246ZF of the Insolvency Act 1986 (IA 1986) were introduced by section 122 of the Small Business, Enterprise and Employment Act 2015 (SBEEA 2015). IA 1986, s 246ZE(1) itself states, ‘[t]his section applies where, for the purposes of this Group of Parts, a person (‘P’) seeks a decision about any matter from a company's creditors or contributories’.

The ‘Group of Parts’ to which it refers includes IA 1986, ss 91–96, the provisions concerning members’ voluntary liquidations (MVL). This tends to suggest that the qualifying decision and deemed consent procedures do apply to MVLs.

However, the title to SBEEA 2015, s 122, is ‘Abolition of Requirement to Hold Meetings: Company Insolvency’. The Explanatory Note to SBEEA 2015 confirms this:

‘These sections amend the Insolvency Act 1986 so that physical meetings will not be the default mechanism for seeking decisions from creditors and contributories in insolvency proceedings.’

MVL is not, in fact, an insolvency proceeding, requiring as it does a declaration of solvency before the company can enter MVL.

IA 1986, s 91 provides that a liquidator is appointed in

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