• Remuneration in administration, winding-up and in relation to a Deed of Company Arrangement

    • 1. Application of Schedule

      (1) This Schedule applies to the remuneration of —
      (a) administrators;
      (b) liquidators in creditors' voluntary windings up or windings up by the Court; and
      (c) liquidators in members' voluntary windings up where expressly specified (but not otherwise).
      (2) The paragraphs of this Schedule which by virtue of sub-paragraph (1)(c) apply in members' voluntary windings up are paragraphs —
      (a) 2 (Remuneration: principles);
      (b) 3(5) to (8) and (10) (Remuneration: procedure for initial determination);
      (c) 5(1), (6) and (7) (Remuneration: recourse by administrator or liquidator to the Court);
      (d) 7 (Remuneration: new administrator or liquidator);
      (e) 8 (Remuneration: apportionment of set fees);
      (f) 9(1)(c), (2), (3), (4) and (5) to (8) (Creditors' or members' claim that remuneration is, or other expenses are, excessive); and
      (g) 10 (Remuneration in winding-up where assets realised on behalf of charge holder).
      (3) This Schedule does not apply to the remuneration of provisional liquidators.

    • 2. Remuneration: principles

      (1) An administrator or liquidator (including in a members' voluntary winding-up) is entitled to receive remuneration for services as Office-holder.
      (2) The basis of remuneration must be fixed —
      (a) as a percentage of the value of —
      (i) the property with which the administrator has to deal; or
      (ii) the assets which are realised, distributed or both realised and distributed by the administrator or liquidator;
      (b) by reference to the time properly given by the Office-holder and the Office-holder's staff in attending to matters arising in the administration, in connection with the Deed of Company Arrangement or winding-up; or
      (c) as a set amount;
      or any combination of them; and different bases may be fixed in respect of different things done by the Office-holder.
      (3) Where the basis of remuneration is fixed as in sub-paragraph (2)(a), different percentages may be fixed in respect of different things done by the Office-holder.
      (4) The matters to be determined in fixing the basis of remuneration are —
      (a) which of the bases set out in sub-paragraph (2) are to be fixed and (where appropriate) in what combination;
      (b) the percentage or percentages (if any) to be fixed under sub-paragraphs (2)(a) and (3);
      (c) the amount (if any) to be set under sub-paragraph (2)(c).
      (5) In arriving at that determination, regard must be had 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 Office-holder, any responsibility of an exceptional kind or degree;
      (c) the effectiveness with which the Office-holder appears to be carrying out, or to have carried out, the Office-holder's duties as such; and
      (d) the value and nature of the property with which the Office-holder has to deal.
      (6) If the Office-holder is a lawyer and employs the firm, or any partner in it, to act on behalf of the Company, profit costs must not be paid unless expressly authorised in the determination.

    • 3. Remuneration: procedure for initial determination

      (1) It is for the creditors' committee, subject to sub-paragraph (4), to determine the basis of remuneration in an administration or winding-up of a Company (except in a members' voluntary winding-up).
      (2)
      (a) If there is no creditors' committee in an administration or winding-up, or the creditors' committee does not make the requisite determination, and —
      (i) in an administration, the case does not fall within sub-paragraph (3); or
      (ii) in a creditors' voluntary winding-up or a winding-up by the Court, subject to sub-paragraph (4),
      the basis of remuneration may be fixed by a resolution of a meeting of creditors.
      (b) Where there is a Deed of Company Arrangement, the basis of remuneration may be fixed by a resolution of a meeting of creditors.
      (3) If the administrator of a Company has made a statement under Section 61(6)(b) (Requirement for initial creditors' meeting) and there is no creditors' committee, or the creditors' committee does not make the requisite determination, the basis of the administrator's remuneration may be fixed by the approval of —
      (a) each secured creditor of the Company; or
      (b) if the administrator has made or intends to make a distribution 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) Where —
      (a) a Company which is in administration moves into winding-up under Section 122(1) (Moving creditors' voluntary liquidation) and the administrator becomes the liquidator; or
      (b) a winding-up order is made immediately upon the appointment of an administrator ceasing to have effect and the Court under Section 210(3) (Appointment of provisional liquidator or of liquidator following administration) appoints as liquidator the person whose appointment as administrator has ceased to have effect,
      the basis of remuneration fixed under this paragraph for the administrator is treated as having been fixed for the liquidator, and sub-paragraphs (1) and (2) do not apply.
      (5) In a members' voluntary winding-up, it is for the Company in general meeting to determine the basis of remuneration.
      (6) If not fixed as above, the basis of the administrator's remuneration or the liquidator's remuneration in a voluntary winding-up (including a members' voluntary winding-up) must, on application by the administrator or liquidator, be fixed by the Court.
      (7) An application under sub-paragraph (6) may not be made by the administrator or liquidator without having first sought fixing of the basis in accordance with sub-paragraph (1), (2), (3) or (5) (as the case may be).
      (8) In a members' voluntary winding-up, the liquidator must deliver at least 14 days' notice of an application under sub-paragraph (6) to the Company's contributories, or such one or more of them as the Court may direct; and the contributories may nominate one or more of their number to appear, or be represented, and to be heard on the application.
      (9) If, in a winding-up by the Court, the basis of remuneration is not fixed as above after the liquidator has requested the creditors to fix the basis in accordance with sub-paragraph (2) or in any event within 18 months after the date of the liquidator's appointment, the liquidator is entitled to such sum as is arrived at (subject to sub-paragraph (10)) by —
      (a) applying the realisation scale published by the Board to the moneys received by the liquidator from the realisation of the assets of the Company (after deducting any sums paid to secured creditors in respect of their securities and any sums spent out of money received in carrying on the business of the Company); and
      (b) adding to the sum arrived at under sub-paragraph (a) such sum as is arrived at by applying the distribution scale published by the Board to the value of assets distributed to creditors of the Company (including payments made in respect of preferential debts) and to contributories.
      (10) Where a number of persons are appointed as administrators or joint liquidators, it is for them to agree between themselves as to how the remuneration payable should be apportioned and any dispute arising between them may be referred —
      (a) to the Court, for settlement by order; or
      (b) to the creditors' committee, a meeting of creditors or (in a members' voluntary winding-up) the Company in general meeting, for settlement by resolution.

    • 4. Remuneration: recourse by administrator or liquidator to creditors

      (1) If the basis of —
      (a) the administrator's remuneration has been fixed by the creditors' committee;
      (b) the liquidator's remuneration has been fixed by the creditors' committee; or
      (c) the liquidator's remuneration had, in a case falling within paragraph 3 (Remuneration: procedure for initial determination), been fixed by the creditors' committee in a preceding administration and the administrator had not subsequently requested an increase under this paragraph,
      and the Office-holder considers an amount fixed to be insufficient or basis fixed to be inappropriate, the Office-holder may request that the amount be increased or the basis changed by resolution of the creditors.
      (2) If the administrator of a Company has made a statement under Section 61(6)(b) (Requirement for initial creditors' meeting), the basis of his remuneration has been fixed by the creditors' committee, and the administrator of the Company considers an amount fixed to be insufficient or basis fixed to be inappropriate, the administrator of the Company may request that the amount be increased or the basis changed by the approval of —
      (a) each secured creditor of the Company; or
      (b) if the administrator of the Company has made or intends to make a distribution 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.

    • 5. Remuneration: recourse by administrator or liquidator to the Court

      (1) If the basis of —
      (a) the remuneration of an administrator has been fixed —
      (i) by the creditors' committee, the administrator has requested that the amount be increased or the basis changed by resolution of the creditors, but the creditors have not changed it; or
      (ii) by resolution of the creditors; or
      (b) the liquidator's remuneration has been fixed —
      (i) by the creditors' committee, the liquidator has requested that the amount be increased or the basis changed by resolution of the creditors, but the creditors have not changed it;
      (ii) by resolution of the creditors;
      (iii) under paragraph 3(4) or (9) (Remuneration: procedure for initial determination) of this Schedule; or
      (iv) in a members' voluntary winding-up, by the Company in general meeting,
      and the Office-holder considers an amount fixed to be insufficient or basis fixed to be inappropriate, the Office-holder may apply to the Court for an order increasing the amount or changing the basis.
      (2) If the administrator of a Company has made a statement under Section 61(6)(b) (Requirement for initial creditors' meeting), the basis of his remuneration has been fixed by the approval of creditors in accordance with paragraph 4(2) (Remuneration: recourse by administrator or liquidator to creditors) of this Schedule and he considers an amount fixed to be insufficient or basis fixed to be inappropriate, he may apply to the Court for an order increasing the amount or changing the basis.
      (3) Where an application is made under sub-paragraph (2), the administrator of a Company must deliver notice to each of the creditors whose approval was sought under paragraph 4(2) (Remuneration: recourse by administrator or liquidator to creditors) of this Schedule.
      (4) The administrator of a Company or liquidator (except in a members' voluntary winding-up) must deliver at least 14 days' notice of the application to the members of the creditors' committee and the committee may nominate one or more members to appear, or be represented, and to be heard on the application.
      (5) If there is no creditors' committee or in the case of an administrator of a Deed of Company Arrangement, the Office-holder's notice of the application must (except in a members' voluntary winding-up) be delivered to such one or more of the Company's creditors as the Court may direct, and those creditors may nominate one or more of their number to appear or be represented.
      (6) In a members' voluntary winding-up, the liquidator must deliver at least 14 days' notice of the application to the Company's contributories, or such one or more of them as the Court may direct and the contributories may nominate one or more of their number to appear, or be represented, and to be heard on the application.
      (7) The Court may, if it appears to be a proper case (including in a members' voluntary winding-up), order the costs of the Office-holder's application, including the costs of any member of the creditors' committee appearing or being represented on it, or of any creditor or contributory so appearing or being represented, to be paid as an expense of the administration or liquidation or an expense for the purposes of the Deed of Company Arrangement, as the case may be.

    • 6. Remuneration: review at request of administrator or liquidator

      (1) Where, after the basis of the Office-holder's remuneration has been fixed, there is a material and substantial change in the circumstances which were taken into account in fixing it, the Office-holder may request that it be changed.
      (2) The request must be made —
      (a) where the creditors' committee fixed the basis, to the creditors' committee;
      (b) where the creditors fixed the basis, to the creditors;
      (c) where the Court fixed the basis, by application to the Court; and
      (d) where, in a winding-up, the remuneration was determined under paragraph 3(9) (Remuneration: procedure for initial determination) of this Schedule, to the Liquidation Committee or creditors' committee if there is one and otherwise to the creditors;
      and the preceding provisions of this Schedule apply as appropriate.
      (3) Where paragraph 4 (Remuneration: recourse by administrator or liquidator to creditors) is applied in accordance with sub-paragraph (2), ignore the words in paragraph 4(1)(c) (Remuneration: recourse by administrator or liquidator to creditors), "and the administrator had not subsequently requested an increase under this paragraph".
      (4) Any change in the basis for remuneration applies from the date of the request under sub-paragraph (2) and not for any earlier period.

    • 7. Remuneration: new administrator or liquidator

      If a new administrator or liquidator (including in a members' voluntary winding-up) is appointed in place of another, any determination, resolution or Court order in effect under the preceding provisions of this Schedule immediately before the former Office-holder ceased to hold office continues to apply in relation to the remuneration of the new Office-holder until a further determination, resolution or Court order is made in accordance with those provisions.

    • 8. Remuneration: apportionment of set fees

      (1) In a case (including in a members' voluntary winding-up) in which the basis of the Office-holder's remuneration is a set amount under paragraph 2(2)(c) (Remuneration: principles) of this Schedule and the former Office-holder ceases (for whatever reason) to hold office before the time has elapsed or the work has been completed in respect of which the amount was set, application may be made for determination of what portion of the amount should be paid to the former Office-holder or the former Office-holder's personal representative in respect of the time which has actually elapsed or the work which has actually been done.
      (2) Application may be made —
      (a) by the former Office-holder or the former Office-holder's personal representative within the period of 28 days beginning with the date upon which the former Office-holder ceased to hold office; or
      (b) by the Office-holder for the time being in office if the former Office-holder or the former Office-holder's personal representative has not applied by the end of that period.
      (3) Application must be made —
      (a) where the creditors' committee fixed the basis, to the creditors' committee;
      (b) where the creditors fixed the basis, to the creditors for a resolution determining the portion;
      (c) where the Company in general meeting fixed the basis, to the Company for a resolution determining the portion; or
      (d) where the Court fixed the basis, to the Court for an order determining the portion.
      (4) The applicant must deliver a copy of the application to the Office-holder for the time being or to the former Office-holder or the former Office-holder's personal representative, as the case may be ("the recipient").
      (5) The recipient may, within 21 days of receipt of the copy of the application, deliver notice of intent to —
      (a) make representations to —
      (i) the creditors' committee;
      (ii) the creditors; or
      (iii) the Company in general meeting; or
      (b) appear or be represented before the Court, as the case may be.
      (6) No determination may be made upon the application until expiry of the 21 days referred to in sub-paragraph (5) or, if the recipient does deliver notice of intent in accordance with that sub-paragraph, until the recipient has been afforded the opportunity to make representations or to appear or be represented, as the case may be.
      (7) If the former Office-holder or the former Office-holder's personal representative (whether or not the original applicant) considers that the portion determined upon application to the creditors' committee or the creditors is insufficient, that person may apply —
      (a) in the case of a determination by the creditors' committee, to the creditors for a resolution increasing the portion; or
      (b) in the case of a resolution of —
      (i) the creditors (whether under sub-paragraph (3)(b) or under sub-paragraph (7)(a)); or
      (ii) the Company in general meeting,
      to the Court for an order increasing the portion
      and sub-paragraphs (4) to (6) apply as appropriate.

    • 9. Creditors' or members' claim that remuneration is, or other expenses are, excessive

      (1) The following may apply to the Court for one or more of the orders in sub-paragraph (8) —
      (a) a secured creditor;
      (b) an unsecured creditor with either —
      (i) the concurrence of at least ten (10)% in value of the unsecured creditors (including that creditor); or
      (ii) the permission of the Court; or
      (c) in a members' voluntary winding-up —
      (i) members of the Company with at least ten (10)% of the total voting rights of all the members having the right to vote at general meetings of the Company; or
      (ii) a member of the Company with the permission of the Court.
      (2) An application may be made on the grounds that —
      (a) the remuneration charged by the Office-holder;
      (b) the basis fixed for the Office-holder's remuneration under paragraphs 2 (Remuneration: principles) and 3 (Remuneration: procedure for initial determination) of this Schedule; or
      (c) expenses incurred by the Office-holder,
      is or are, in all the circumstances, excessive or, in the case of an application under sub-paragraph (2)(b), inappropriate.
      (3) The application by a creditor or member must be made no later than eight weeks (or, in a case falling within Section 240 (Removal or resignation of liquidator), four weeks) after receipt by the applicant of the progress report, or the final account or report under Section 182 (Final meeting prior to dissolution) or Section 213 (Duty to summon final meeting) (as applicable) which first reports the charging of the remuneration or the incurring of the expenses in question ("the relevant report").
      (4) If the Court thinks that no sufficient cause is shown for a reduction, it must deliver to the applicant notice to that effect; and —
      (a) if, within five business days of delivery of that notice, the applicant applies to the Court to fix a venue for a hearing, without notice to any other party, as to whether sufficient cause is shown, the Court will do so; but
      (b) if the applicant does not deliver notice in accordance with sub-paragraph (4)(a), the Court may dismiss the application without a hearing.
      (5) The Court must fix a venue for the application to be heard, and deliver notice to the applicant if the application is not dismissed —
      (a) after a hearing under sub-paragraph (4)(a); or
      (b) without a hearing in accordance with sub-paragraph (4)(b).
      (6) The venue must be fixed for not less than 28 days after delivery to the applicant of the notice under sub-paragraph (4).
      (7) The applicant must, at least 14 days before the hearing, deliver to the Office-holder a notice stating the venue and accompanied by a copy of the application and of any evidence which the applicant intends to provide in support of it.
      (8) If the Court considers the application to be well-founded, it must make one or more of the following orders —
      (a) an order reducing the amount of remuneration which the Office-holder is entitled to charge;
      (b) an order reducing any fixed amount;
      (c) an order changing the basis of remuneration;
      (d) an order that some or all of the remuneration or expenses in question be treated as not being expenses of the administration, expenses for the purposes of the Deed of Company Arrangement or winding-up expenses; and
      (e) an order that the administrator or liquidator or the administrator's or liquidator's personal representative pay to the Company the amount of the excess of remuneration or expenses or such part of the excess as the Court may specify,
      and may make any other order that it thinks just; but an order under sub-paragraph (8)(b) or (c) may be made only in respect of periods after the period covered by the relevant report.
      (9) Unless the Court orders otherwise under sub-paragraph (10), the costs of the application must be paid by the applicant, and are not payable as an expense of the administration or the Deed of Company Arrangement or as winding-up expenses.
      (10) The Court may order that the costs may be payable by the applicant, by the respondent or as an expense.

    • 10. Remuneration in winding-up where assets realised on behalf of charge holder

      (1) A liquidator (including in a members' voluntary winding-up) who realises assets on behalf of a secured creditor is entitled to such sum by way of remuneration as is arrived at —
      (a) in a winding-up where the assets are subject to a charge which when created was a mortgage or a fixed charge, by applying the realisation scale published by the Board to the moneys received by the liquidator in respect of the assets realised (after deducting any sums spent out of money received in carrying on the business of the Company);
      (b) in a winding-up where the assets realised are subject to a charge which when created was a floating charge, by —
      (i) applying the realisation scale published by the Board to moneys received by the liquidator from the realisation of those assets (ignoring any sums received which are spent in carrying on the business of the Company); and
      (ii) adding to the sum arrived at under sub-paragraph (b)(i) such sum as is arrived at by applying the distribution scale published by the Board to the value of the assets distributed to the holder of the charge and payments made in respect of preferential debts.
      (2) The sum to which the liquidator is entitled must be taken out of the proceeds of the realisation.

    • 11. Voting on remuneration

      Where a resolution is proposed in a creditors' voluntary winding-up or a compulsory winding-up which affects a person in relation to that person's remuneration or conduct as liquidator, that person and the partners and employees of that person must not vote on it, whether as creditor, contributory, proxy-holder or corporate representative, unless the proxy specifically directs the proxy-holder to vote in that way.