8. Distribution of Cellular Assets

(1) Subject to Sections 263 (Insolvency of clearing and settlement intermediaries or authorised market institutions; client assets) of these Regulations, the cellular assets attributable to the cell in respect of which the Cell Liquidation Order was made shall be applied by the Cell Liquidator in satisfaction of the following liabilities in the order of priority of —
(a) all remuneration and expenses properly incurred by the Cell Liquidator in winding-up the cell;
(b) any preferential debts of the Protected Cell Company which are attributable to the business or cellular assets of the cell; and
(c) the remainder of the cell's liabilities in accordance with sub-paragraph (3);
subject to that application, any surplus shall be distributed in accordance with sub-paragraphs (4) and (5).
(2) Creditors of a cell that is subject to a Cell Liquidation Order shall be regarded as preferential creditors of the cell to the extent they would be preferential creditors under Schedule 8 (Preferential Debts) of these Regulations if —
(a) the cell was a Company; and
(b) the Cell Liquidator was a liquidator under these Regulations.
(3) The cell's unsecured debts (including all or any part of a secured debt which is treated as unsecured in accordance with Schedule 5 (Proofs and Distribution) in a winding-up) (other than the remuneration and expenses of the Cell Liquidator and preferential debts) rank equally between themselves in the Cell Liquidation and shall be paid in full unless the cellular assets are insufficient to meet them, in which case they abate in equal proportions among themselves.
(4) Subject to the Articles of the Protected Cell Company, any surplus shall be distributed among the cell members in respect of the cell that is subject to the Cell Liquidation Order or the persons otherwise entitled to the surplus, in each case according to their respective rights and interests in or against the Protected Cell Company.
(5) Where there are no cell members in respect of the cell and no persons otherwise entitled to the surplus, any surplus shall be paid to the Protected Cell Company and shall become a non-cellular asset of the Protected Cell Company.