HL Deb 23 October 1985 vol 467 cc1206-7

101 After Clause 34, insert the following new clause: "Power to dispose of charged property etc. .—(1) Where, on an application by the administrative receiver of a company, the court is satisfied that the disposal (with or without other assets) of any relevant property which is subject to a security other than one to which subsection (2) below applies would be likely to promote a more advantageous realisation of the company's assets than would otherwise be effected, the court may by order authorise the administrative receiver to dispose of the property as if it were not subject to the security. (2) This subsection applies to—

  1. (a) any security held by the person by or on whose behalf the administrative receiver was appointed: and
  2. (b) any security to which a security falling within paragraph (a) above has priority.
(3) It shall be a condition of an order under this section 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 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. (4) Where a condition imposed in pursuance of subsection (3) 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. (5) An office copy of an order under this section shall, within fourteen days of the making of the order, be sent by the administrative receiver to the registrar of companies. (6) If the administrative receiver without reasonable excuse fails to comply with subsection (5) 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. (7) In this section "relevant property", in relation to the administrative receiver of a company, means the property of which he is or, but for the appointment of some other person as the receiver of part of the company's property, would be the receiver or manager.".).

Lord Cameron of Lochbroom

My Lords, I beg to move that this House do agree with the Commons in their Amendment No. 101. I should also like to speak to Amendments Nos. 129 and 129A.

129 After Clause 43, insert the following new clause— ("Disposal of interest in properly. .—(1) Section 477 of the 1985 Act (disposal of interest in property) shall be amended as follows— (2) In subsection (2)

  1. (a) at the beginning there shall be inserted the words "Subject to subsection (2A) below,"; and
  2. (b) the words from "But that authorisation" to the end of the subsection shall be omitted.
(3) After subsection (2) there shall be inserted the following subsection—
  1. "(2A) In the case of an application where a fixed security over the property or interest in question which ranks prior to the floating charge has not been met or provided for in full, the court shall not authorise the sale or disposal of the property or interest in question unless it is satisfied that the sale or disposal would be likely to provide a more advantageous realisation of the company's assets than would otherwise be effected.
  2. (2B) It shall be a condition of an authorisation to which subsection (2A) above applies that—
  3. (a) the net proceeds of the disposal; and
  4. (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 interest in the open market by a willing seller, such sums as may be required to make good the deficiency,
 shall be applied towards discharging the sums secured by the fixed security. (2C) Where a condition imposed in pursuance of sub-section (2B) above relates to two or more such fixed 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 fixed securities in the order of their priorities. (2D) A copy of an authorisation under subsection (2) above certified by the clerk of court shall, within 14 days of the granting of the authorisation, be sent by the receiver to the registrar of companies. (2E) If the receiver without reasonable excuse fails to comply with subsection (2D) above, he is liable to a fine and, for continued contravention, to a daily default fine." ")