§ 129A Page 202, line 26, column 3, at end insert—
| ("In section 477(2), the words from "But that authorisation" onwards.") |
§ My Lords, these amendments introduce two new clauses, the first of which replaces Clause 35 and reproduces the provisions contained in that clause and adds several refinements. The second brings the provisions for Scotland into line with those for England and Wales. The new clause is designed to enable the administrative receiver in England and Wales and the receiver in Scotland to sell a property free from a security if the court is satisfied that the sale is likely to promote a more advantageous realisation of the assets.
§ In most cases it is envisaged that a receiver would be able to negotiate with chargeholders to persuade them to sell a charged asset as part of his rescue scheme. However, this provision may be used by the receiver when a successful receivership is being frustrated by a secured creditor who refuses to allow assets charged to them to be sold unless the security is redeemed in full. The chargeholders' interests are protected by the provisions which make it a condition of any order that the net proceeds must be handed to the chargeholder, which will be the amount likely to be raised by a sale on the open market by a willing vendor less any necessary expenses incurred in effecting the sale.
§ If the amount realised is less then it will be a condition of the order that the receiver pays over the difference. It is not intended that the power of sale should extend to fixed charge properties over which the appointer of the administrator receiver has no subsequent floating charge. This is made clear in subsection (7) of Amendment No. 101. A further refinement is the requirement that the receiver should send an office copy of the order to the registrar of companies with penalties for failure to do so. This is so that third parties may satisfy themselves with a receiver's powers to effect a sale.
§ The amendment to Amendment No. 129 makes a minor consequential amendment to Section 477 of the Companies Act 1985. I beg to move.
§ Moved, That this House do agree with the Commons in their Amendment No. 101.—(Lord Cameron of Lochbroom.)
§ On Question, Motion agreed to.