The Public Services Reform (Corporate Insolvency and Bankruptcy) (Scotland) Order 2017

2017No. 209

REGULATORY REFORM

INSOLVENCY

COMPANIES

BANKRUPTCY

The Public Services Reform (Corporate Insolvency and Bankruptcy) (Scotland) Order 2017

Made15thJune2017

Coming into force in accordance with article 1(2) in accordance with article 1(3)(a) otherwise in accordance with article 1(3)(b)1stAugust20171stOctober2017

The Scottish Ministers make the following Order in exercise of the powers conferred by section 17(1) and (9) of the Public Services Reform (Scotland) Act 2010( 1) and all other powers enabling them to do so.

The Scottish Ministers consider that the conditions in section 18(2) of that Act are satisfied.

The Scottish Ministers have consulted in accordance with section 26 of that Act.

The Scottish Ministers have laid a draft of this Order and an explanatory document before the Scottish Parliament in accordance with section 25(2)(b) of that Act.

In accordance with section 25(2)(c) of that Act, a draft of this Order has been approved by resolution of the Scottish Parliament( 2).

Citation, commencement and interpretation

1.—(1) This Order may be cited as the Public Services Reform (Corporate Insolvency and Bankruptcy) (Scotland) Order 2017.

(2) Subject to paragraph (3), this Order comes into force on 1st August 2017.

(3) Articles 2 to 5 come into force—

(a) on 1st October 2017 insofar as they enable the making of—

(i) rules under section 411 of the 1986 Act; or

(ii) any other subordinate legislation under the 1986 Act; and

(b) insofar as not already in force, on the day appointed for the coming into force, for all remaining purposes, of section 122 of the Small Business, Enterprise and Employment Act 2015( 3) in Scotland.

(4) In this Order—

(a) “the 1986 Act” means the Insolvency Act 1986( 4); and

(b) “the 2016 Act” means the Bankruptcy (Scotland) Act 2016( 5).

Amendment of section 70 of the 1986 Act: interpretation for Chapter 2 of Part 3 (receivers in Scotland)

2. In section 70(1) of the 1986 Act—

(a) repeal the definition “prescribed”; and

(b) insert in the appropriate place according to alphabetical order—

““prescribed fee” means the fee prescribed by regulations made under this Chapter by the Secretary of State;”.

Amendment of section 101 of the 1986 Act: liquidation committee (creditors' voluntary winding up)

3. In section 101 of the 1986 Act( 6) repeal subsection (4).

Amendment of section 142 of the 1986 Act: liquidation committee (winding up by the court)

4. In section 142 of the 1986 Act( 7)

(a) after subsection (3) insert—

“(3A) A “liquidation committee” is a committee having such functions as are conferred on it by or under this Act.”; and

(b) repeal subsection (6).

Amendment of section 246A of the 1986 Act: remote attendance at meetings

5. In section 246A of the 1986 Act( 8)

(a) repeal subsection (2); and

(b) in subsection (10)(a) after “administrator,” insert “receiver (appointed under section 51)”.

New section 173A of the 2016 Act: effect of protected status on essential supplies

6. After section 173 of the 2016 Act insert—

173A Effect of protected status on essential supplies

(1) An insolvency-related term of a contract for the supply of essential goods or services to a debtor ceases to have effect if—

(a) a trust deed granted by the debtor is granted protected status, and

(b) the supply is for the purpose of a business which is or has been carried on by or on behalf of the debtor.

(2) An insolvency-related term of a contract does not cease to have effect by virtue of subsection (1) to the extent that—

(a) it provides for the contract or the supply to terminate, or any other thing to take place, because the individual becomes subject to an insolvency procedure other than a trust deed,

(b) it entitles a supplier to terminate the contract or the supply, or do any other thing, because the individual becomes subject to an insolvency procedure other than a trust deed, or

(c) it entitles a supplier to terminate the contract or the supply because of an event that occurs, or may occur, after a trust deed granted by the debtor is granted protected status.

(3) Where an insolvency-related term of a contract ceases to have effect under this section the supplier may—

(a) terminate the contract, if the condition in subsection (4) is met,

(b) terminate the supply, if the condition in subsection (7) is met.

(4) The condition in this subsection is that—

(a) the trustee under the trust deed consents to the termination of the contract,

(b) on application by the supplier the court grants permission for the termination of the contract, or

(c) any charges in respect of the supply that are incurred after the date of protection of the trust deed are not paid within the period of 28 days beginning with the day on which payment is due.

(5) An application by the supplier under subsection (4)(b) is to be made to the sheriff who, had a petition for sequestration of the estate been presented at the date the trust deed was granted, would have had jurisdiction to hear that petition in terms of section 15(1) or (3).

(6) The court may grant permission under subsection (4)(b) only if satisfied that the continuation of the contract would cause the supplier hardship.

(7) The condition in this subsection is that—

(a) the supplier gives written notice to the trustee under the trust deed that the supply will be terminated unless the trustee personally guarantees the payment of any charges in respect of the continuation of the supply after the date of protection of the trust deed, and

(b) the trustee does not give...

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