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There are changes to the Act mainly designed to bring in the required changes following the abolition of physical meetings in the first instance.
Approval is now by a creditors decision making procedure namely -
- Electronic Voting; or
- Virtual Meeting.
Contents of the Proposal
Any proposal must comply with the general principles set out in rule 8.2I IR2016 -
- It must identify the debtor;
- Explain why an IVA is desirable;
- Explain why creditors are expected to agree the IVA;
- Be authenticated (within the meaning of r 1.5 IR 2016) and dated by the debtor.
Other than that rule 8.3 sets out the content now required to be in an IVA (replacing rule 5.3(2) IR 1986). It is summarised in table form in categories such as Assets, Liabilities, Guarantees etc.
The proposal must contain a statement of affairs and the contents of this are set out in rule 8.5. This is largely repeated from the old rules save that there is provision in rule 8.6 to omit disclosure (following a Court order) that would either
- Cause likely prejudice to the conduct of the IVA; or
- Might reasonably be expected to lead to violence against any person;
This is largely unchanged from existing procedure and is set out in rules 8.8 to 8.18 but it is worth reviewing the rules the first time you make an application as there are changes to format to include -
- Rule 8.10 sets out the specific matters to include within a stay ordered without notice on receipt of the application pursuant to section 254(1)(b) IA 86 which is designed to stay specific actions pending the first hearing of the application for an interim order;
- Rule 8.12 sets out the specific matters to include within an interim order to enable the Court to consider the Nominee's report;
- Rule 8.14 sets out the specific matters to include within an order on the application of the Nominee for an extension of time to file their report;
- Rule 8.15 sets out the specific matters to include with an interim order to enable creditors to consider the debtor's proposal following consideration of the Nominee's report.
Consideration of the Proposal
All references to a meeting to consider the proposal are now removed and the process and contents of the notice to creditors is set out in rule 8.22 Insolvency Rules 2016.
The decision date must be not less than 14 days from delivery of the notice and not more than 28 days from the date on which -
- The Nominee received the document and statement of affairs referred to in s256A(2) IA 86 (non-interim order route); or
- The Nominee's report was considered by the Court (interim order route).
Request for a Physical Meeting
A request for a physical meeting can be made by creditors pursuant to rule 15.6 Insolvency Rules 1986 but must be made not later than five business days after the notice to creditors of the decision procedure is delivered.
Where the required proportion of creditors (10 creditors, 10% of total creditors or 10% in value of creditors) the convenor must summon a meeting within 3 business days of the threshold being met.
This meeting needs to comply with rule 15.8 Insolvency Rules 2016.