Rule 1.26A of The Insolvency Rules 1986 - Company Voluntary Arrangements (CVAs)

Supervisor's accounts of receipts and payments and reports

 

A Supervisor of a Company Voluntary Arrangement (CVA) is responsible for the company money that comes into his hands. Under Insolvency Rule 1.26A the Supervisor must, as a minimum, keep full records of all of his receipts and payments. This insolvency rule prescribes that the Supervisor must prepare an annual report of all of his receipts and payments and circulate that report to specified people within prescribed time limits

 

The actual wording of Insolvency Rule 1.26A is shown below in bold.

 

Insolvency Rules 1986 - Rule 1.26A - Supervisor's accounts and reports

 

(1) Paragraph (2) applies where the voluntary arrangement authorises or requires the supervisor—

(a) to carry on the business of the company or trade on its behalf or in its name; or

(b) to realise assets of the company; or

(c) otherwise to administer or dispose of any of its funds.

 

(2) The supervisor must keep accounts and records of the supervisor’s acts and dealings in, and in connection with, the arrangement, including in particular records of all receipts and payments of money.

 

(3)  The supervisor must preserve any accounts and records in paragraph (2) which-

  (a) were kept by any other person who has acted as supervisor of the arrangement; and

  (b)  are in the supervisor’s possession.

 

(4) Subject to paragraph (5), the supervisor must in respect of each period of 12 months ending with the anniversary of the commencement of the arrangement send within 2 months of the end of that period a report on the progress and prospects for the full implementation of the voluntary arrangement to—

(a) the registrar of companies;

(b) the company;

(c) all those of the company’s creditors who are bound by the voluntary arrangement of whose address the supervisor is aware;

(d) subject to paragraph (7) below, the members of the company; and

(e) if the company is not in liquidation, the company’s auditors (if any) for the time being.

 

(5) The supervisor is released from an obligation to send a report under paragraph (4), if an obligation to send a final report under Rule 1.29 arises in the period of 2 months mentioned in paragraph (4).

 

(6) Where the supervisor is authorised or required to do any of the things mentioned in paragraph (1)(a) to (c) the report required to be sent pursuant to paragraph (4) must include or be accompanied by—

(a) an abstract of receipts and payments required to be recorded by virtue of paragraph (2); or

(b) where there have been no such receipts and payments, a statement to that effect.

 

(7) The court may, on application by the supervisor dispense with the sending under this Rule of abstracts or reports to members of the company, either altogether or on the basis that the availability of the abstract or report to members is to be advertised by the supervisor in a specified manner.

 

Insolvency Rule 1.26A provides the law as to the period (twelve monthly) in respect of which a Supervisor of a CVA must prepare a receipts and payments account and report. The Rule also provides the requirement of the date by which the report must be made available and to whom it must be sent.