Schedule 6

[Schedule 15A TO 1986 ACT]

Application of Other companies Insolvency Legislation to Building Societies.

Part I
 
General Mode of Application

1.-

 (1) Subject to the provisions of this Schedule, the enactments specified in sub-paragraph (2) below (referred to in this Schedule as "the enactments") apply in relation to building societies as they apply in relation to companies limited by shares and registered under the Companies Act 1985 or (as the case may be) the Companies (Northern Ireland) Order 1986.

 (2) The enactments referred to in sub-paragraph (1) above are-

• (a) Parts I and II, Chapter I of Part III, Parts VI, VII, XII and XIII, section 434 and Part XVIII of the Insolvency Act 1986, or
• (b) Parts I to IV, VII, XI and XII and Article 378 of the Insolvency (Northern Ireland) Order 1989,  and, in so far as they relate to offences under any such enactment, sections 430 and 432 of, and Schedule 10 to, the Insolvency Act 1986 or Article 2(6) and 373 of, and Schedule 7 to, the Insolvency (Northern Ireland) Order 1989.

2.-

  (1) The enactments shall, in their application to building societies, have effect with the substitution-

• (a) for "company" of "building society";
• (b) for "the registrar of companies" or "the registrar" of "the central office";
• (c) for "the articles" of "the rules"; and
• (d) for "registered office" of "principal office".

 (2) In the application of the enactments to building societies-

• (a) every reference to the officers, or to a particular officer, of a company shall have effect as a reference to the officers, or to the corresponding officer, of the building society and as including a person holding himself out as such an officer; and
• (b) every reference to an administrative receiver shall be omitted.

 3.-

1. Where any of the enactments as applied to building societies requires a notice or other document to be sent to the central office, it shall have effect as if it required the central office to keep the notice or document in the public file of the society concerned and to record in that file the date on which the notice or document is placed in it.
2. Where any of the enactments, as so applied, refers to the registration, or to the date of registration, of such a notice or document, that enactment shall have effect as if it referred to the placing of the notice or document in the public file or (as the case may be) to the date on which it was placed there.
   

 4.-

1. Rules may be made under section 411 of the Insolvency Act 1986 or, as the case may be, Article 359 of the Insolvency (Northern Ireland) Order 1989 for the purpose of giving effect, in relation to building societies, to the provisions of the enactments.
2. An order made by the competent authority under section 414 of the Insolvency Act 1986 may make provision for fees to be payable under that section in respect of proceedings under the enactments and the performance by the official receiver or the Secretary of State of functions under them.
3. An order made by the Department of Economic Development under Article 361 of the Insolvency (Northern Ireland) Order 1989 may make provision for fees to be payable under that Article in respect of proceedings under the enactments and the performance by the official receiver or that Department of functions under them.
   

5.-

Any enactment which specifies a money sum altered by order under section 416 of the Insolvency Act 1986, or, as the case may be, Article 362 of the Insolvency (Northern Ireland) Order 1989, (powers to alter monetary limits) applies with the effect of the alteration.

Part II

Modified Application of Parts I and II and Chapter I OF Part III Of Insovency Act 1986

Preliminary
6. In this Part of this Schedule, the Insolvency Act 1986 is referred to as "the Act".

Voluntary arrangements
7. Section 1 of the Act (proposals for voluntary arrangements) has effect as if-

•  (a) it required any proposal under Part I of the Act to be so framed as to enable a building society to comply with the requirements of this Act; and
•  (b) any reference to debts included a reference to liabilities owed to the holders of shares in a building society.  

8. In section 2 (procedure where nominee is not liquidator or administrator) and section 3 (summoning of meetings) of the Act as applied to a building society, any reference to a meeting of the society is a reference to-

• (a) a meeting of both shareholding and borrowing members of the society; and
• (b) a meeting of shareholding members alone.

 9. In section 6 of the Act (challenge of decisions) as applied to a building society, "contributory"-

• (a) means every person liable to contribute to the assets of the society in the event of its being wound up, and
• (b) for the purposes of all proceedings for determining, and all proceedings prior to the determination of, the persons who are to be deemed contributories, includes any person alleged to be a contributory, and
• (c) includes persons who are liable to pay or contribute to the payment of-  

• (i) any debt or liability of the building society being wound up, or
• (ii) any sum for the adjustment of rights of members among themselves, or
• (iii) the expenses of the winding up; but does not include persons liable to contribute by virtue of a declaration by the court under section 213 (imputed responsibility for fraudulent trading) or section 214 (wrongful trading) of the Act.
    

Administration orders
10. -

(1) Section 8 of the Act (power of court to make administration order) has effect as if it included provision that, where-

• (a) an application for an administration order to be made in relation to a building society is made by the Commission (with or without other parties); and
• (b) the society has defaulted in an obligation to pay any sum due and payable in respect of any deposit or share,  the society shall be deemed for the purposes of subsection (1) to be unable to pay its debts.

(2) In subsection (3) of that section, paragraph (c) and, in subsection (4) of that section, the words from "nor where" to the end are omitted.
 

 11. -

(1) Subsection (1) of section 9 of the Act (application for administration order) as applied to a building society has effect as if-

• (a) it enabled an application to the court for an administration order to be by petition presented, with or without other parties, by the Commission or by a shareholding member entitled under section 89(3) of this Act to petition for the winding up of the society; and
• (b) the words from "or by the clerk" to "on companies)" were omitted.

(2) In subsection (2)(a) of that section as so applied, the reference to any person who has appointed, or is or may be entitled to appoint, an administrative receiver of the society is a reference to the Commission (unless it is a petitioner).

(3) Subsection (3) of that section, and in subsection (4) of that section, the words "Subject to subsection (3)," are omitted.

12.

In section 10 of the Act (effect of application for administration order), the following are omitted, namely-

• (a) in subsection (2), paragraphs (b) and (c); and
• (b) subsection (3).

13.

In section 11 of the Act (effect of administration order), the following are omitted, namely-

• (a) in subsection (1), paragraph (b) and the word "and" immediately preceding that paragraph;
• (b) in subsection (3), paragraph (b);
• (c) in subsection (4), the words "an administrative receiver of the company has vacated office under subsection (1)(b), or"; and
• (d) subsection (5).

14.

In subsection (1) of section 12 of the Act (notification of administration order), the reference to every invoice, order for goods or business letter is a reference to every statement of account, order for goods or services, business letter or advertisement.

15.

Subsection (3) of section 13 of the Act (appointment of administrator) has effect as if it enabled an application for an order under subsection (2) of that section to be made by the Commission.

16. -

(1) Subject to sub-paragraph (2) below, section 14 of the Act (general powers of administrator) has effect as if it required the administrator of a building society, in exercising his powers under that section-

• (a) to ensure compliance with the provisions of this Act; and
• (b) not to appoint to be a director any person who is not a fit and proper person to hold that position. 
   

(2) Sub-paragraph (1)(a) above does not apply in relation to section 5, 6 or 7 of this Act or paragraph (a) of the seventh criterion in section 45(3) of this Act.

(3) In subsection (4) of that section as applied to a building society, the reference to any power conferred by the Act or the Companies Act 1985 or by the memorandum or articles of association is a reference to any power conferred by this Act or by the society's memorandum or rules.

(4) Subsection (8) of section 45 of this Act applies for the purposes of sub-paragraph (1)(b) above as it applies for the purposes of the seventh criterion in subsection (3) of that section.

17.-

(1) Subject to sub-paragraph (3) below, paragraph 16 of Schedule 1 to the Act (powers of administrators) as applied to a building society has effect as if it conferred power to transfer liabilities in respect of deposits with or shares in the society.

(2) No transfer under that paragraph shall be a transfer of engagements for the purposes of Part X of this Act.

(3) No transfer under that paragraph which, apart from sub-paragraph (2) above, would be a transfer of engagements for the purposes of that Part shall be made unless it is approved by the court, or by meetings summoned under section 23(1) or 25(2) of the Act (as modified by paragraph 21 or 23 below).

18.

In section 15 of the Act (power to deal with charged property etc.)-

• (a) subsection (1) is omitted; and
• (b) for subsections (3) and (4) there is substituted the following subsection-

"(3) Subsection (2) applies to any security other than one which, as created, was a floating charge."

19.-

(1) Section 17 of the Act (general duties of administrator) has effect as if, instead of the requirement imposed by subsection (3), it required the administrator of a building society to summon a meeting of the society's creditors if-

• (a) he is requested, in accordance with the rules, to do so by 500 of the society's creditors, or by one-tenth, in number or value, of those creditors, or
• (b) he is directed to do so by the court.

(2) That section also has effect as if it required the administrator of a building society to summon a meeting of the society's shareholding members if-

• (a) he is requested, in accordance with the rules, to do so by 500 of the society's shareholding members, or by one-tenth, in number, of those members, or
• (b) he is directed to do so by the court.
  

20.

In subsection (4) of section 19 of the Act (vacation of office) as applied to a building society, the words "in priority to any security to which section 15(1) then applies" are omitted.

21. -

(1) Subsection (1) of section 23 of the Act (statement of proposals) as applied to a building society has effect as if-

• (a) the reference to the central office included a reference to the Commission and the Investor Protection Board;
• (b) the reference to all creditors included a reference to all holders of shares in the society; and
• (c) the reference to a meeting of the society's creditors included a reference to a meeting of holders of shares in the society.

(2) In subsection (2) of that section as so applied, references to members of the society do not include references to holders of shares in the society.

22.

Section 24 of the Act (consideration of proposals by creditors' meeting) as applied to a building society has effect as if any reference to a meeting of creditors included a reference to a meeting of holders of shares in the society.

23.-

(1) Section 25 of the Act (approval of substantial revisions) as applied to a building society has effect as if-

• (a) subsection (2) required the administrator to send a statement in the prescribed form of his proposed revisions to the Commission and to the Investor Protection Board; and
• (b) the reference in that subsection to a meeting of creditors included a reference to a meeting of holders of shares in the society.

(2) In subsection (3) of that section as so applied, references to members of the society do not include references to holders of shares in the society.

24.

Subsection (1) of section 27 of the Act (protection of interests of creditors and members) has effect-

• (a) as if it enabled the Commission or Investor Protection Board to apply to the court by petition for an order under that section; and
• (b) in relation to an application by the Commission or that Board, as if the words "(including at least himself)" were omitted. 
   
  

Receivers and managers

25.

In section 38 of the Act (receivership accounts), "prescribed" means prescribed by regulations made by statutory instrument by the Commission.

26.

In subsection (1) of section 39 of the Act (notification that receiver or manager appointed), the reference to every invoice, order for goods or business letter is a reference to every statement of account, order for goods or services, business letter or advertisement.

27.

Section 40 (payment of debts out of assets subject to floating charge) and sections 42 to 49 (administrative receivers) of the Act are omitted.