Rule 1.38 of The Insolvency Rules 1986 - Company Voluntary Arrangements (CVAs)

The Nominee's Statement in relation to a CVA proposal requesting a moratorium


The process to apply for a freeze on creditors taking any enforcement actions (a moratorium) before a creditors meeting to consider a Company Voluntary Arrangement (CVA) proposal involves a licensed insolvency practitioner, known as the "Nominee", considering the directors' proposal documents before issuing his opinion on that proposal in what is known as the "Nominee's statement".


Insolvency Rule 1.38 requires that the Nominee's Statement must,

- be promptly delivered back to the directors, and

- contain the Nominee's opinion on the CVA proposal, and

- confirm that the Nominee is prepared to act as Supervisor of the proposed arrangement - should the CVA be agreed by the creditors at a later meeting. 


The actual wording of Insolvency Rule 1.38 is reproduced below in bold.


Insolvency Rules 1986 - Rule 1.38 - The nominee's statement


(1) The nominee shall submit to the directors the statement required by paragraph 6(2) of Schedule A1 to the Act within 28 days of the submission to him of the document setting out the terms of the proposed voluntary arrangement.

(2) The statement shall have annexed to it— 

(a) the nominee's comments on the proposal, unless the statement contains an opinion in the negative on any of the matters referred to in paragraph 6(2)(a) and (b) of Schedule A1 to the Act, in which case he shall instead give his reasons for that opinion, and

(b) where he is willing to act in relation to the proposed arrangement, a statement of his consent to act. 


As a result of Rule 1.38 of The Insolvency Rules 1986 a Nominee who acts in a proposal for a CVA with a moratorium must commit himself in what is known as a Nominee's Statement as to his opinion (positive or negative) as to the likelihood of the CVA being likely to meet with the agreement of creditors.


Cookie Preference

We use cookies on our website so you get the best experience and so that we can see where our site is working well and where it is not so that we can improve it for you.

We have already set one cookie essential for the normal operation of the site, however we would like your permission to activate performance monitoring cookies so that we can see how the site is performing, specifically Google Analytics and Google Adwords conversions. For full details of the cookies we'd like to use please refer to our cookie policy.

Please make a choice below as to whether you will allow the cookies or not. Thank you!

Allow Cookies     No Thanks