Insolvency Act

590. Protection for secured and preferential creditors

Edition: 2022-12-31 · In force

(1)An administrator's statement of proposals under section 566 may not include action that—

(a)affects the right of a secured creditor of the company to enforce the creditor's security;

(b)would result in a preferential debt of the company being paid otherwise than in priority to its non-preferential debts; or

(c)would result in one preferential creditor of the company being paid a smaller proportion of that creditor's debt than another.

(2)Subsection (1) does not apply to—

(a)action to which the relevant creditor consents;

(b)a proposal for a voluntary arrangement under Part IX;

(c)a proposal for a compromise or arrangement to be sanctioned under the Companies Act (Cap. 486); or

(d)a proposal for a cross-border merger.

(3)The reference to a statement of proposals in subsection (1) includes a reference to a statement as revised or modified.