Company Voluntary Arrangements (CVAs) - Law - CVA with a moratorium
Schedule A1 - Insolvency Act 1986 - Paragraph 28 - Challenge of nominee's actions resulting in his replacement
The Nominee to a Company Voluntary Arrangement (CVA) may not survive the moratorium period! He may be replaced as Nominee, under the provisions of Paragraph 28 of Schedule A1 to The Insolvency Act 1986, if;
- His actions as Nominee are challenged & if the court then decides to replace him, or
- He dies, or
- He forms the conclusion that it is not possible for him to continue
The actual wording of Paragraph 28 of Schedule A1 to The Insolvency Act 1986 is reproduced below in bold.
28. (1) The court may—
(a) on an application made by the directors in a case where the nominee has failed to comply with any duty imposed on him under this Schedule or has died, or
(b) on an application made by the directors or the nominee in a case where it is impracticable or inappropriate for the nominee to continue to act as such,
direct that the nominee be replaced as such by another person qualified to act as an insolvency practitioner, or authorised to act as nominee, in relation to the voluntary arrangement.
(2) A person may only be appointed as a replacement nominee under this paragraph if he submits to the court a statement indicating his consent to act.
An insolvency practitioner acting as a Nominee to a company (in the Company Voluntary Arrangement moratorium period ahead of the creditors meeting to consider the CVA proposal) may be replaced for various reasons. Paragraph 28 of Schedule A1 to The Insolvency Act 1986 sets out the reasons and the procedure for arranging for a replacement Nominee.