Rule 1.25 of The Insolvency Rules 1986 - Company Voluntary Arrangements (CVAs)

Procedure for the Revocation or suspension of a CVA- Rule for Calling a new CVA Meeting



We know from Section 6 of The Insolvency Act 1986 that a decision of a Company Voluntary Arrangement (CVA) meeting to consider a CVA  proposal can be challenged in Court. If the Court then decides that the challenge has merit and  the Court orders the end of the CVA or orders that a further meeting is to be held then it is Insolvency Rule 1.25 that provides details of the procedure that must be followed. Insolvency Rule 1.25 provides details of who must be notified of the Court Order and within what time limit - Additionally the Rule specifies the procedure that then recipient of the Order must follow to carry the order into effect.


The actual wording of Insolvency Rule 1.25 is shown below in bold.


Insolvency Rules 1986 - Rule 1.25 - Revocation or Suspension of the CVA Arrangement 


(1) This Rule applies where the court makes an order of revocation or suspension under section 6.

(2) The person who applied for the order shall serve sealed copies of it—

(a) on the supervisor of the voluntary arrangement, and

(b) on the directors of the company or the administrator or liquidator (according to who made the proposal for the arrangement).

Service on the directors may be effected by service of a single copy of the order on the company at its registered office.

(3) If the order includes a direction by the court under section 6(4)(b) for any further meetings to be summoned, notice shall also be given (by the person who applied for the order) to whoever is, in accordance with the direction, required to summon the meetings.

(4) The directors or (as the case may be) the administrator or liquidator shall—

(a) [ as soon as reasonably practicable]after receiving a copy of the court's order, give notice of it to all persons who were sent notice of the creditors' and company meetings or who, not having been sent that notice, appear to be affected by the order;

(b) within [5 business] days of their receiving a copy of the order (or within such longer period as the court may allow), give notice to the court whether it is intended to make a revised proposal to the company and its creditors, or to invite re-consideration of the original proposal.

(5) The person on whose application the order of revocation or suspension was made shall, within [5 business days] days after the making of the order, deliver a copy of the order to the registrar of companies



Insolvency Rule 1.25 provides the law on the who must be notified of the content of the Court Order following a Court challenge to a Company Voluntary Arrangement (CVA) proposal and the procedure and time constraints for acting on that order.