Rule 1.12 of The Insolvency Rules 1986 - Company Voluntary Arrangements (CVAs)

Preparation of the CVA Proposal and Notice to Nominee - Where the company is already in liquidation or administration



Insolvency Rule 1.12 only applies when the company involved that wishes to propose a Company Voluntary Arrangement (CVA) is already in liquidation or administration - and where the liquidator (or administrator) is not to act as nominee under the proposed CVA.  


When a company is in liquidation or administration the company directors have no powers. It is for that reason that under Rule 1.12 it is the liquidator or administrator who is to prepare the CVA proposal (not the directors).


There are a lot of cross references to other Rules in Rule 1.12 - The reason for that is that the responsible insolvency practitioner who prepares the CVA is subject to most of those other Rules and procedures that a  director would have to follow if it were a director that had proposed the CVA.

The actual wording of Insolvency Rule 1.12 is reproduced below in bold



Insolvency Rules 1986 - Chapter 4 - Rule 1.12 - Preparation of proposal and notice to nominee


(1) The responsible insolvency practitioner shall give notice to the intended nominee, and prepare his proposal for a voluntary arrangement, in the same manner as is required of the directors, in the case of a proposal by them, under Chapter 2.

(2) Rule 1.2 applies to the responsible insolvency practitioner as it applies to the directors; and Rule 1.4 applies as regards the action to be taken by the nominee.

(3) The content of the proposal shall be as required by Rule 1.3, [(and, where relevant, Rule 1.10], reading references to the directors as referring to the responsible insolvency practitioner.

(4) Rule 1.6 applies in respect of the information to be furnished to the nominee, reading references to the directors as referring to the responsible insolvency practitioner.

(5) With the proposal the responsible insolvency practitioner shall provide a copy of the company's statement of affairs.

(6) Where the company is being wound up by the court, the responsible insolvency practitioner shall send a copy of the proposal to the official receiver, accompanied by the name and address of the insolvency practitioner [or authorised person] who has agreed to act as nominee.

(7) Rules 1.7 to 1.9 apply as regards a proposal under this Chapter as they apply to a proposal under Chapter 2.


Insolvency Rule 1.12 therefore identifies the responsibility of who must prepare the Company Voluntary Arrangement (CVA) proposal when the company concerned is already subject to an insolvency process such as liquidation or administration. Rule 1.12 then goes on to set how the responsible insolvency practitioner must act in terms of,

- the mandatorily required content of the CVA proposal and the statement of affairs

- notice to the nominee

- how meetings are to be summoned etcetera.