HL Deb 23 October 1985 vol 467 cc1163-4

72 After Clause 18, insert the following new clause: 'Power to deal with charged property etc. .—(1) The administrator of a company may dispose of or otherwise exercise his powers in relation to any property of the company which is subject to a security to which this subsection applies as if the property were not subject to the security. (2) Where, on an application by the administrator of a company, the court is satisfied that the disposal (with or without other assets) of—

  1. (a) any property of the company subject to a security to which this subsection applies; or
  2. (b) any goods in the possession of the company under a hire-purchase agreement,
would be likely to promote the purpose or one or more of the purposes specified in the administration order, the court may by order authorise the administrator to dispose of the property as if it were not subject to the security or to dispose of the goods as if all rights of the owner under the hire-purchase agreement were vested in the company. (3) Subsection (1) above applies to—
  1. (a) any security held by a person (whether by virtue of the security or otherwise) appointed or, but for section 16(2)(6) above, would be entitled to appoint an administrative receiver of the company;
  2. (b) any security to which a security falling within paragraph (a) above has priority; and
  3. (c) any security which, as created, was a security over existing or future book debts;
and subsection (2) above applies to any security not falling within paragraph (a), (b) or (c) above. (4) Where any property is disposed of under subsection (1) above, the security shall have effect in relation to any property of the company which represents the property disposed of as if—
  1. (a) the security had been created by the company as a floating charge over the property; and
  2. (b) any condition precedent to the exercise of the right to appoint a receiver of the property by virtue of the security were satisfied.
 (5) It shall be a condition of an order under subsection (2) above that—
  1. (a) the net proceeds of the disposal; and
  2. (b) where those proceeds are less than such amount as may be determined by the court to be the net amount which would be realised on a sale of the property or goods in the open market by a willing vendor, such sums as may be required to make good the deficiency,
 shall be applied towards discharging the sums secured by the security or payable under the hire-purchase agreement. (6) Where a condition imposed in pursuance of subsection (5) above relates to two or more securities, that condition shall require the net proceeds of the disposal and, where paragraph (b) of that subsection applies, the sums mentioned in that paragraph to be applied towards discharging the sums secured by those securities in the order of their priorities. (7) An office copy of an order under subsection (2) above shall, within fourteen days after the making of the order, be sent by the administrator to the registrar of companies. (8) If the administrator without reasonable excuse fails to comply with subsection (7) above, he shall be liable on summary conviction to a fine not exceeding one-fifth of the statutory maximum and, for continued contravention, to a daily default fine not exceeding one-fiftieth of the statutory maximum. (9) Where any property is disposed of under this section in its application to Scotland, the administrator shall grant to the disponee an appropriate document of transfer or conveyance of the property, and—
  1. (a) that document; or
  2. (b) where any recording, intimation or registration of that document is a legal requirement for completion of title to the property, that recording, intimation or registration,
 has the effect of disencumbering the property of or, as the case may be, freeing the property from the security. (10) Nothing in this section shall be taken as prejudicing applications to the court under section 30 below. (11) References in this section to hire-purchase agreements include references to conditional sale agreements, chattel leasing agreements and retention of title agreements.'.