Rule 1.54 of The Insolvency Rules 1986 - Company Voluntary Arrangements (CVAs) where a prior Moratorium was obtained
The law on how the Company Voluntary Arrangement (CVA) is implemented
Insolvency Rule 1.54 is probably the most complex written Rule in insolvency - being replete with cross references. Where do we start? It is best to relate Rule 1.54 to your particular circumstances - if you require free advice please let us know.
Having said that the gist of this insolvency rule is that it is concerned with the rules applicable to a Supervisor implementing a CVA where it is one where a moratorium was initially obtained.
Insolvency Rules 1.22, 1.22A, 1.24, 1.25, 1.26, 1.27, 1.28 and 1.29 therefore have to be amended to reflect that a moratorium CVA case is being addressed.
Why does Insolvency Rule 1.23 not apply to such a case? The answer is that that Rule 1.23 is concerned with the "hand over of property to the Supervisor of an approved CVA" where no moratorium was initially obtained. The "hand over" rule is therefore replaced for moratorium cases by Insolvency Rule 1.54.
The actual wording of Insolvency Rule 1.54 is reproduced below in bold.
Insolvency Rules 1986 - Rule 1.54 - Implementation of the (Company Voluntary) arrangement
(1) Where a decision approving the arrangement has effect under paragraph 36 of Schedule A1 to the Act, the directors shall [as soon as reasonably practicable] do all that is required for putting the supervisor into possession of the assets included in the arrangement.
(3) The provisions referred to in paragraph (2) are modified as follows—
(d) in paragraph (1) of Rule 1.25 the reference to section 6 is to be read as a reference to paragraph 38 of Schedule A1 to the Act and the references in paragraphs (2) and (4) to the administrator or liquidator shall be ignored;
In reality there is nothing inherently complex about Insolvency Rule 1.54 - all the law draftsman has done is to reduce the volume of words that would otherwise have appeared in the legislation by instead inserting cross references rather than starting from scratch by simply creating the necessary new Rules to replace Rules 1.22, 1.22A, 1.23, 1.24, 1.25, 1.26, 1.27, 1.28 and 1.29 for the implementation of those CVA cases where a moratorium was initially obtained.