Application to challenge an act or decision of the supervisor in a company voluntary arrangement
| Author | Mark Watson-Gandy |
| Pages | 269-279 |
BACKGROUND
The procedure for challenging decisions, acts or omissions of the supervisor is under section 7(3) of the Insolvency Act 1986. The court has unlimited powers to oversee the conduct of the arrangement by the supervisor. The company’s creditors or any other person dissatisfied with the act, omission or decision of the supervisor may apply to the court.
APPLICATION
The application is made by application notice on Form IAA returnable to the registrar.
The application should state:
ƒ which decision is being challenged;
ƒ what decision the court should direct the supervisor to make instead; ƒ what relief is sought.
The applicant may be:
ƒ any of the company’s creditors;
ƒ any person with an interest who is dissatisfied with the decision.
COURT FEES
Where fresh proceedings need to be brought, a court fee of £280 is payable.
270 Corporate Insolvency Practice
EVIDENCE
A witness statement should be prepared in support of the application. A witness statement in support of the application must be filed and served on any respondent not less than 14 days before the hearing. This should address:
ƒ the identity of the deponent;
ƒ the name of the company
ƒ the company’s registered number
ƒ the stage at which the CVA has reached;
ƒ what the deponent’s interest is in the decision (whether he is a creditor or a member, what value should be given to his vote and why);
ƒ what decision the supervisor made;
ƒ when the decision was made;
ƒ the date of the meeting;
ƒ why that decision is wrong.
The witness statement should exhibit:
ƒ a copy of the arrangement or proposal;
ƒ proof of the debt relied on;
ƒ any documents evidencing the decision made and its date.
SERVICE
If the applicant is the supervisor (seeking directions), then the application is without notice unless the company is in administration or liquidation. If the company is in administration or liquidation, then the administrator or liquidator should be served and they should be named as respondent. If the applicant is the administrator or liquidator, the application can be made without notice. If the applicant is a person entitled to vote at either the creditors’ or members’ meetings, then the supervisor should be served and named as a respondent on the application.
The usual rule is that, subject to any other express provision, the application must be served at least 14 days before the date fixed for the hearing.
Service may be effected personally
service on that person’s solicitor, if they are authorised to accept service on that person’s behalf.
THE RESPONDENT’S EVIDENCE
Any evidence to be filed by the respondent should be filed not later than 7 days before the hearing.
KEY STATUTORY PROVISIONS
Section 7 of the Insolvency Act 1986
7 Implementation of proposal
(1) This section applies where a voluntary arrangement has effect under section 4A.
(2) The person who is for the time being carrying out in relation to the voluntary arrangement the functions conferred—
(a) on the nominee by virtue of the approval given at one or both of the meetings summoned under section 3,
(b) by virtue of section 2(4) or 4(2) on a person other than...
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