• Chapter 11 Chapter 11 — Replacing Administrator

    • 128. Resignation of administrator

      (1) An administrator may resign only in prescribed circumstances.
      (2) Where an administrator may resign he may do so only —
      (a) in the case of an administrator of the Company appointed by administration order, by notice in writing to the Court;
      (b) in the case of an administrator of the Company appointed under Section 21 (Power to appoint), by notice in writing to the holder of the qualifying charge by virtue of which the appointment was made;
      (c) in the case of an administrator of the Company appointed under Section 29(1) (Power to appoint), by notice in writing to the Company;
      (d) in the case of an administrator of the Company appointed under Section 29(2) (Power to appoint), by notice in writing to the Directors of the Company; or
      (e) in the case of an administrator of a Deed of Company Arrangement, by notice in writing to the Company and the Court.

    • 129. Grounds for resignation

      (1) The administrator may give notice of his resignation on grounds of ill health or because —
      (a) he intends ceasing to be an insolvency practitioner; or
      (b) there is some conflict of interest, or change of personal circumstances, which precludes or makes impracticable the further discharge by him of the duties of administrator.
      (2) The administrator may, with the permission of the Court, give notice of his resignation on grounds other than those specified in subsection (1).

    • 130. Notice of intention to resign

      (1) The administrator shall in all cases give at least five (5) business days' notice in the prescribed form of his intention to resign, or to apply for the Court's permission to do so, to the following persons —
      (a) in the case of an administrator of the Company —
      (i) if there is a continuing administrator of the Company, to him; and
      (ii) if there is a creditors' committee, to it; but
      (iii) if there is no such administrator and no creditors' committee, to the Company and its creditors.
      (b) in the case of an administrator of a Deed of Company Arrangement, to the Company and its creditors.
      (2) Where the administrator of a Company was appointed by the holder of a qualifying charge under Section 21 (Power to appoint), the notice of intention to resign shall also be sent to all holders of prior qualifying charges, and to the person who appointed the administrator of the Company.
      (3) Where the administrator of the Company was appointed by the Company or the Directors of the Company under Section 29 (Power to appoint), a copy of the notice of intention to resign shall also be sent to the appointor and all holders of a qualifying charge.

    • 131. Notice of resignation

      (1) The notice of resignation shall be in the prescribed form.
      (2) Where the administrator of a Company was appointed under an administration order, the notice shall be filed with the Court, and a copy sent to the Registrar. A copy of the notice of resignation shall be sent not more than five (5) business days after it has been filed with the Court to all those to whom notice of intention to resign was sent.
      (3) Where the administrator of a Company was appointed by the holder of a qualifying charge under Section 21 (Power to appoint), a copy of the notice of resignation shall be filed with the Court and sent to the Registrar, and anyone else who received a copy of the notice of intention to resign, within five (5) business days of the notice of resignation being sent to the holder of the qualifying charge by virtue of which the appointment was made.
      (4) Where the administrator of a Company was appointed by the Company or the Directors under Section 29 (Power to appoint), a copy of the notice of resignation shall be filed with the Court and sent to the Registrar and to anyone else who received notice of intention to resign within five (5) business days of the notice of resignation being sent to either the Company or the Directors that made the appointment.
      (5) In the case of an administrator of a Deed of Company Arrangement, a copy of the notice of resignation shall be filed with the Court and sent to the Registrar and to anyone else who received notice of his intention to resign within five (5) business days of the notice of resignation being filed with the Court.

    • 132. Removal of administrator from office

      The Court may by order remove an administrator from office.

    • 133. Application to Court to remove administrator from office

      (1) Any application under Section 132 (Removal of administrator from office) shall state the grounds on which it is requested that the administrator should be removed from office.
      (2) Service of the notice of the application shall be effected on the administrator and, in the case of an administrator of a Company, the person who made the application for the administration order or the person who appointed the administrator, the creditors' committee (if any), the joint administrator (if any), and where there is neither a creditors' committee or joint administrator, on the Company and all the creditors, including any qualifying charge holders and, in the case of an administrator of a Deed of Company Arrangement, the joint administrator (if any), the Company and all the creditors, in each case not less than five (5) business days before the date fixed for the application to be heard. Where the appointment was made under Section 21 (Power to appoint), the notice shall be served on the holder of the qualifying charge by virtue of which the appointment was made.
      (3) Where a Court makes an order removing the administrator it shall give a copy of the order to the applicant who as soon as reasonably practicable shall send a copy to the administrator.
      (4) The applicant shall also within five (5) business days of the order being made send a copy of the order to all those to whom notice of the application was sent.
      (5) A copy of the order shall also be sent to the Registrar within the same time period.

    • 134. Administrator ceasing to be licensed

      (1) The administrator of a Company or of a Deed of Company Arrangement shall vacate office if he ceases to be licensed to act as an insolvency practitioner in relation to the Company or a Deed of Company Arrangement.
      (2) Where an administrator vacates office by virtue of subsection (1) he shall give notice in writing —
      (a) in the case of an administrator of a Company appointed by administration order, to the Court;
      (b) in the case of an administrator of a Company appointed under Section 21 (Power to appoint), to the holder of the qualifying charge by virtue of which the appointment was made;
      (c) in the case of an administrator of a Company appointed under Section 29(1) (Power to appoint), to the Company;
      (d) in the case of an administrator of a Company appointed under Section 29(2) (Power to appoint), to the Directors of the Company; or
      (e) in the case of an administrator of a Deed of Company Arrangement, to the Company, the creditors of the Company and the Court.
      (3) An administrator who fails without reasonable excuse to comply with subsection (2) commits a contravention and is liable to a fine at the relevant level set out in the Fines Schedule.

    • 135. Notice of vacation of office when administrator ceases to be licensed to act

      Where the administrator who has ceased to be licensed to act as an insolvency practitioner in relation to the Company or a Deed of Company Arrangement, as the case may be, gives notice in accordance with Section 134 (Administrator ceasing to be licensed), he shall also give notice to the Registrar.

    • 136. Administrator deceased

      (1) Subject as follows, where the administrator has died, it is the duty of his personal representatives to give notice of the fact to the Court, specifying the date of the death. This does not apply if notice has been given under either subsection (2) or (3).
      (2) If the deceased administrator was a partner in or an employee of a firm, notice may be given by a partner in the firm who is licensed to act as an insolvency practitioner.
      (3) Notice of the death may be given by any person producing to the Court the relevant death certificate or a copy of it.
      (4) Where a person gives notice to the Court under this Section, he shall also give notice to the Registrar.

    • 137. Supplying vacancy in office of administrator

      (1) This Section applies where an administrator —
      (a) dies;
      (b) resigns;
      (c) is removed from office under Section 132 (Removal of administrator from office); or
      (d) vacates office under Section 134 (Administrator ceasing to be qualified).
      (2) Where the administrator of a Company was appointed by administration order, the Court may replace the administrator of the Company on an application under this Section made by —
      (a) a creditors' committee of the Company;
      (b) the Company;
      (c) the Directors of the Company;
      (d) one or more creditors of the Company; or
      (e) where more than one person was appointed to act jointly or concurrently as the administrator of the Company, any of those persons who remain in office.
      (3) But an application may be made in reliance on subsection (2)(b) to (d) only where —
      (a) there is no creditors' committee of the Company;
      (b) the Court is satisfied that the creditors' committee or a remaining administrator of the Company is not taking reasonable steps to make a replacement; or
      (c) the Court is satisfied that for another reason it is right for the application to be made.
      (4) Where the administrator of the Company was appointed under Section 21 (Power to appoint) the holder of the qualifying charge by virtue of which the appointment was made may replace the administrator of the Company.
      (5) Where the administrator of the Company was appointed under Section 29(1) (Power to appoint) by the Company it may replace the administrator of the Company.
      (6) A replacement under subsection (5) may be made only —
      (a) with the consent of each person who is the holder of a qualifying charge in respect of the Company's property; or
      (b) where consent is withheld, with the permission of the Court.
      (7) Where the administrator of the Company was appointed under Section 29(2) (Power to appoint) the Directors of the Company may replace the administrator of the Company.
      (8) A replacement under subsection (7) may be made only —
      (a) with the consent of each person who is the holder of a qualifying charge in respect of the Company's property; or
      (b) where consent is withheld, with the permission of the Court.
      (9) The Court may replace an administrator of the Company on the application of a person listed in subsection (2) if the Court —
      (a) is satisfied that a person who is entitled to replace the administrator of the Company under any of subsections (4), (5) or (7) is not taking reasonable steps to make a replacement; or
      (b) that for another reason it is right for the Court to make the replacement.
      (10) The Court may replace an administrator of a Deed of Company Arrangement on the application of a creditor or creditors, or a liquidator or provisional liquidator, of the Company concerned.

    • 138. Application to replace

      (1) Where an application is made to the Court under Section 137(2), 137(9) or 137(10) (Supplying vacancy in office of administrator) to appoint a replacement administrator, the application shall be accompanied by a written statement in the prescribed form by the person proposed to be the replacement administrator.
      (2) Where the original administrator was appointed under an administration order, a copy of the application shall be served, in addition to those persons listed in Section 8(2) (Administration application), on the person who made the application for the administration order.
      (3) Where the application to the Court is made under Section 137(9) (Supplying vacancy in office of administrator), the application shall be accompanied by a witness statement setting out the applicant's belief as to the matters set out in that subsection.
      (4) Section 15 (Manner in which service to be effected) shall apply to the service of an application under Section 137(2), 137(9) or 137(10) (Supplying vacancy in office of administrator) as it applies to service in accordance with Section 13 (Service of administration application).
      (5) Sections 16 (Proof of service), 17 (Administration application to appoint specified person as administrator by holder of qualifying charge), 19 (The hearing), 20(1) and 20(2) (Notice of administration order) apply to an application under Section 137(2) or 137(9) (Supplying vacancy in office of administrator) and Sections 16 (Proof of service), 19 (The hearing) (but treating references to administrator of the Company as administrator of a Deed of Company Arrangement), 20(1) and 20(2) (Notice of administration order) apply to an application under Section 137(10) (Supplying vacancy in office of administrator).

    • 139. Notification and advertisement of replacement administrator

      (1) Where a replacement administrator is appointed, the same provisions apply in respect of giving notice of, and advertising, the replacement appointment as in the case of the appointment (subject to subsection (2)), and all statements, consents etc. as are required shall also be required in the case of the appointment of a replacement. All forms and notices shall clearly identify that the appointment is of a replacement administrator.
      (2) The replacement administrator shall send notice of the appointment to the Registrar.

    • 140. Substitution of administrator: competing qualifying charge-holder

      (1) This Section applies where an administrator of a Company is appointed under Section 21 (Power to appoint) by the holder of a qualifying charge in respect of the Company's property.
      (2) The holder of a prior qualifying charge in respect of the Company's property may apply to the Court for the administrator to be replaced by an administrator nominated by the holder of the prior charge.

    • 141. Substitution of administrator appointed by Company or Directors: creditors' meeting

      (1) This Section applies where —
      (a) an administrator of a Company is appointed by a Company or Directors under Section 29 (Power to appoint); and
      (b) there is no holder of a qualifying charge in respect of the Company's property.
      (2) A creditors' meeting may replace the administrator of the Company.
      (3) A creditors' meeting may act under subsection (2) only if the new administrator's written consent to act is presented to the meeting before the replacement is made.

    • 142. Vacation of office: discharge from liability

      (1) Where a person ceases to be the administrator of a Company or of a Deed of Company Arrangement (whether because he vacates office by reason of resignation, death or otherwise, because he is removed from office or because his appointment ceases to have effect) he is discharged from liability in respect of any action of his as administrator.
      (2) The discharge provided by subsection (1) takes effect —
      (a) in the case of an administrator who dies, on the filing with the Court of notice of his death;
      (b) in the case of an administrator of a Company appointed under Section 21 (Power to appoint) or Section 29 (Power to appoint), at a time appointed by resolution of the creditors' committee or, if there is no committee, by resolution of the creditors; or
      (c) in any case, at a time specified by the Court.
      (3) For the purpose of the application of subsection (2)(b) in a case where the administrator of a Company has made a statement under Section 61(6)(b) (Requirement for initial creditors' meeting), a resolution shall be taken as passed if (and only if) passed with the approval of —
      (a) each secured creditor of the Company; or
      (b) if the administrator of the Company has made a distribution to preferential creditors or thinks that a distribution may be made to preferential creditors —
      (i) each secured creditor of the Company; and
      (ii) preferential creditors whose debts amount to more than 50% of the preferential debts of the Company, disregarding debts of any creditor who does not respond to an invitation to give or withhold approval.
      (4) Discharge —
      (a) applies to liability accrued before the discharge takes effect; and
      (b) does not prevent the exercise of the Court's powers under Section 106 (Misfeasance).

    • 143. Vacation of office: charges and liabilities

      (1) This Section applies where a person ceases to be the administrator of a Company (whether because he vacates office by reason of resignation, death or otherwise, because he is removed from office or because his appointment ceases to have effect).
      (2) In this Section —
      (a) "the former administrator" means the person referred to in subsection (1); and
      (b) "cessation" means the time when he ceases to be the Company's administrator.
      (3) The former administrator's remuneration and expenses shall be —
      (a) charged on and payable out of property of which he had custody or control immediately before cessation; and
      (b) payable in priority to any security to which Section 99 (Charged property: floating charge) applies.
      (4) A sum payable in respect of a debt or liability arising out of a contract entered into by the former administrator or a predecessor before cessation shall be —
      (a) charged on and payable out of property of which the former administrator had custody or control immediately before cessation; and
      (b) payable in priority to any charge arising under subsection (3).
      (5) Subsection (4) shall apply to a liability arising under a contract of employment which was adopted by the former administrator or a predecessor before cessation; and for that purpose —
      (a) action taken within the period of fourteen (14) days after an administrator's appointment shall not be taken to amount or contribute to the adoption of a contract;
      (b) no account shall be taken of a liability which arises, or in so far as it arises, by reference to anything which is done or which occurs before the adoption of the contract of employment; and
      (c) no account shall be taken of a liability to make a payment other than wages or salary.
      (6) In subsection (5)(c) "wages or salary" includes —
      (a) a sum payable in respect of a period of holiday (for which purpose the sum shall be treated as relating to the period by reference to which the entitlement to holiday accrued);
      (b) a sum payable in respect of a period of absence through illness or other good cause; and
      (c) a sum payable in lieu of holiday.

    • 144. Administrator's duties on vacating office

      (1) Where the administrator ceases to be in office as such, in consequence of removal, resignation or cesser of qualification as an insolvency practitioner, he is under an obligation as soon as reasonably practicable to deliver up to the person succeeding him as administrator the property of the Company (after deduction of any expenses properly incurred and distributions made by him), but in the case of an administrator of a Deed of Company Arrangement, only to the extent put into and remaining in his possession pursuant to the Deed of Company Arrangement and further to deliver up to that person —
      (a) his records as administrator, including all relevant correspondence, proofs and other related papers; and
      (b) the Company's books, papers and other records, to the extent within his control.
      (2) If the administrator makes default in complying with this Section, he commits a contravention and is liable to a fine at the relevant level set out in the Fines Schedule.