HL Deb 23 October 1985 vol 467 cc1213-6

117 After Clause 38, insert the following new clause: ("Statement of affairs to be submitteed to administrative receiver. .—(1) Where an administrative receiver of a company is appointed, the administrative receiver shall forthwith require some or all of the persons mentioned in subsection (3) below to make out and submit to him a statement in the prescribed form as to the affairs of the company. (2) A statement submitted under this section shall be verified by affidavit by the persons required to submit it and shall show—

  1. (a) particulars of the company's assets, debts and liabilities;
  2. (b) the names and addresses of its creditors;
  3. (c) the securities held by them respectively;
  4. (d) the dates when the securities were respectively given; and
  5. (e) such further or other information as may be prescribed.
(3) The persons referred to in subsection (1) above are—
  1. (a) those who are or have been officers of the company;
  2. (b) those who have taken part in the company's formation at any time within one year before the date of the appointment of the administrative receiver;
  3. (c) those who are in the company's employment, or have been in its employment within that year, and are in the adminstrative receiver's opinion capable of giving the information required;
  4. (d) those who are or have been within that year officers of or in the employment of a company which is, or within that year was, an officer of the company;
 and in this subsection "employment" includes employment under a contract for services. (4) Where any persons are required under this section to submit a statement of affairs to the administrative receiver, they shall do so (subject to subsection (5) below) before the end of the period of twenty-one days beginning with the day after that on which the prescribed notice of the requirement is given to them by the adminstrative receiver. (5) The administrative receiver, if he thinks fit may—
  1. (a) at any time release a person from an obligation imposed on him under subsection (1) or (2) above; or
  2. (b) either when giving the notice mentioned in subsection (4) above or subsequently, extend the period so mentioned;
 and where the administrative receiver has refused to exercise a power conferred by this subsection, the court, if it thinks fit, may exercise it. (6) If a person without reasonable excuse fails to comply with any obligation imposed under this section, he shall be liable—
  1. (a) on summary conviction, to a fine not exceeding the statutory maximum and, for continued contravention, to a daily default fine not exceeding one-tenth of the statutory maximum;
  2. (b) on conviction on indictment, to a fine.")

133 Clause 46, page 31, line 37, leave out '14' and insert '28'.

139 Clause 47, page 32, line 27, leave out from beginning to end of line 29 on page 33 and insert—

("Company's statement of affairs

482.—(1) Where a receiver of a company is appointed, the receiver shall forthwith require some or all of the persons mentioned in subsection (3) below to make out and submit to him a statement in the prescribed form as to the affairs of the company. (2) A statement submitted under this section shall be verified by affadavit by the persons required to submit it and shall show—

  1. (a) particulars of the company's assets, debts and liabilities;
  2. (b) the names and addresses of its creditors;
  3. (c) the securities held by them respectively;
  4. (d) the dates when the securities were respectively given; and
  5. (e) such further or other information as may be prescribed.
(3) The persons referred to in subsection (1) above are—
  1. (a) those who are or have been officers of the company;
  2. (b) those who have taken part in the company's formation at any time within one year before the date of the appointment of the receiver,
    3. 1215
  3. (c) those who are in the company's employment, or have been in its employment within that year, and are in the receiver's opinion capable of giving the information required;
  4. (d) those who are or have been within that year officers of or in the employment of a company which is, or within that year was, an officer of the company;
 and in this subsection "employment" includes employment under a contract for services. (4) Where any persons are required under this section to submit a statement of affairs to the receiver they shall do so (subject to subsection (5) below) before the end of the period of 21 days beginning with the day after that on which the prescribed notice of the requirement is given to them by the receiver. (5) The receiver, if he thinks fit, may—
  1. (a) at any time release a person from an obligation imposed on him under subsection (1) or (2) above; or
  2. (b) either when giving the notice mentioned in subsection (4) above or subsequently extend the period so mentioned,
 and where the receiver has refused to exercise a power conferred by this subsection, the court, if it thinks fit, may exercise it. (6) If a person without reasonable excuse fails to comply with any obligation imposed under this section, he shall be liable to a fine and, for continued contravention, to a daily default fine.

These amendments deal with the submission of a company's statement of affairs and notification of the receiver's appointment. Their main purpose is to achieve consistency between the provisions concerning statements of affairs in the administrator procedure, in receiverships, and in compulsory winding-up, and bring the time limit for notification of the receiver's appointment into line with the equivalent provisions for administrators.

Amendment No. 117 makes the submission of a statement of affairs to the administrative receiver compulsory. This is because of its importance in helping the administrative receiver, who will frequently be continuing to trade, to assess the position of the business. This differs from the provisions in a compulsory winding-up where in most cases trading has ceased and the official receiver may at his discretion dispense with the requirement for a statement of affairs to be prepared.

The time limit for the submission of the statement of affairs remains 21 days but the new clause enables the administrative receiver to extend the period within which it must be submitted without leave of the court. It also enables the administrative receiver to release a person from an obligation to submit a statement of affairs if, having given notice to that person to do so, he subsequently discovers that the person is unable to comply.

If the administrative receiver has either refused to extend the time limit or release a person from his obligation the parties concerned may apply to the court to extend the limit or release the person from that obligation if it thinks fit. Amendment No. 139 achieves the same effect in relation to receivers in Scotland.

Amendment No. 109 puts into effect the time limit recommended by the review committee within which the receiver must advise all known creditors of his appointment unless otherwise directed by the court, and Amendment No. 133 amends the equivalent Scottish receivership provision. I beg to move.

Moved, That this House do agree with the Commons in their Amendment No. 109.—(Lord Cameron of Lochbroom.)

On Question, Motion agreed to.