Rule 1.28 of The Insolvency Rules 1986 - Company Voluntary Arrangements (CVAs)
The insolvency practitioner's Fees, Costs, Charges and Expenses - For acting as Nominee and Supervisor
The professional insolvency practitioner involved with a Company Voluntary Arrangement (CVA) either as Nominee or Supervisor must have his remuneration, fees, costs, charges, expenses and disbursement controlled and authorised. It is Insolvency Rule 1.28 that sets out how the Nominees and Supervisors fees, costs and expenses are sanctioned (approved) and how costs incurred by the Nominee prior to the CVA meeting are approved.
The actual wording of Insolvency Rule 1.28 is shown below in bold.
Insolvency Rules 1986 - Rule 1.28 - Fees, costs, charges & expenses
(1) The fees, costs, charges and expenses that may be incurred for any of the purposes of the voluntary arrangement are—
(a) any disbursements made by the nominee prior to the [decision approving the arrangement taking effect under section 4A] , and any remuneration for his services as such agreed between himself and the company (or, as the case may be, the administrator or liquidator);
(b) any fees, costs, charges or expenses which—
(i) are sanctioned by the terms of the arrangement, or
(ii) would be payable, or correspond to those which would be payable, in an administration or winding up.
A Nominee and / or a Supervisor of a Company Voluntary Arrangement (CVA) cannot draw remuneration, fees, expenses etcetera willy nilly. Such payments must be subject to prior approval / authorisation. It is Insolvency Rule 1.28 that prescribes how that fee authorisation must take place before the insolvency practitioner might draw one penny.