Wholesale Retail Code Change Proposal – Ref CPW115
| Date | 30 March 2021 |
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Wholesale Retail Code Change Proposal – Ref CPW115
Modification
proposal
Wholesale Retail Code Change Proposal – CPW115 – Amending and
updating the definition of Insolvency Event to remove the ‘negative
net assets’ criterion.
Decision
The Authority has decided to reject this Change Proposal
Publication date
30 March 2021
Implementation
date
N/A
Background
Section 10, Default, of the Business Terms of the Wholesaler Retail Code (WRC)
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sets out
the provisions in which a Retailer may be classed as a Defaulting Trading Party. One of
these provisions is where the Retailer is subject to an Insolvency Event, as defined in
Schedule 1, Part 1, Objectives, Principles and Definitions of the WRC. Where a Retailer is
classed as a Defaulting Trading Party because it is subject to an Insolvency Event, the
Wholesaler may;
(a) enforce its rights under various credit support arrangements in accordance with
section 9.14 of the Business Terms;
(b) terminate its Wholesale Contract with the Retailer, having given requisite notice
under section 11 of the Business Terms; and
(c) remove the Retailer’s right to submit Transfer Registration Applications or
request New Supply Points in their Area under section 11.3.1 of the Business
Terms.
Sections 122 and 123 of the Insolvency Act 1986 (the ‘IA86’) set out the circumstances
in which a company is deemed unable to pay its debts. These include:
• Section 123 (1)(e) if it is proved to the satisfaction of the court that the company
is unable to pay its debts as they fall due; and
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Unless otherwise specified, the terms used in this document are those defined in the WRC
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