2.1. Preparation of proposal etc.

2.1.1. If the Directors of a Company wish to propose a Voluntary Arrangement under section 8 (Company arrangements) of the AIFC Insolvency Regulations, the Directors must appoint an Insolvency Practitioner under thatsection asthe Nominee and prepare and give to the Nominee a proposal that includes the following matters:

1. (a) an estimate of the value of the Company’s assets (other than assets that are Excluded Property);
2. (b) a statement of the extent (if any) to which those assets are secured in favour of the Company’s creditors;
3. (c) a statement of the extent (if any) to which particular assets of the Company are to be excluded from the arrangement;
4. (d) particulars of any property, other than assets of the Company itself, that is proposed to be included in the arrangement, the source of the property, and the terms on which it is to be made available for inclusion;
5. (e) a statement of the nature and amount of the Company’s liabilities (other than liabilities in relation to Excluded Property) and, so far as it is within the Directors’ immediate knowledge, how those liabilities are proposed to be met, modified, postponed or otherwise dealt with under the arrangement, and, in particular:
6. (i) how it is proposed to deal with Preferential Creditors and creditors of the Company who are, or claim to be, secured; and

(ii) how Persons connected with the Company who are creditors are proposed to be treated under the arrangement; and

(iii) whether there are, to the Directors’ knowledge, any circumstances giving rise to the possibility that, if the Company were to go into liquidation, claims may be made under section 96 (Transactions at undervalue), 97 (Preferences) or 99 (Invalid security interests) of the AIFC Insolvency Regulations and, if any such circumstances exist, whether and, if so how, it is proposed under the arrangement to make provision for completely or partly indemnifying the Company in relation to the claims;

1. (f) for Excluded Property of the Company—the information mentioned in paragraphs (a), (b), (d) and (e);
2. (g) a statement of whether any, and, if so, what, guarantees have been given of the Company’s debts by other Persons, and, if there are any such guarantees, which of the guarantors are Persons connected with the Company;
3. (h) a statement of the proposed duration of the arrangement;
4. (i) information about the proposed dates of distributions to creditors and estimates of the amounts of the distributions;
5. (j) a statement of how it is proposed to deal with the claims of any Persons who do not consent to the arrangement;
6. (k) a statement of the amount proposed to be paid to the Nominee for remuneration and expenses;
7. (l) a statement of how it is proposed that the Supervisor of the arrangement should be remunerated and the Supervisor’s expenses defrayed;
8. (m) a statement of whether, for the purposes of the arrangement, any guarantees are to be offered by Directors, or other Persons and, if so, whether any Security Interest is to be given or sought;
9. (n) a statement of how funds held for the purposes of the arrangement are to be banked, invested, or otherwise dealt with, pending distribution to creditors;
10. (o) a statement of how funds held for the purpose of payment to creditors, and not paid to creditors on the termination of the arrangement, are to be dealt with;
11. (p) a statement of how the business of the Company is proposed to be conducted during the course of the arrangement;
12. (q) details of any further credit facilities that are intended to be arranged for the Company, and a statement of how the debts arising from them are to be paid;
13. (r) a statement of the Functions to be Exercised by the Supervisor of the arrangement;
14. (s) a statement of whether it is likely that there will be other proceedings in other jurisdictions.

2.1.2 If the Company is an Authorised Person, the Directors must obtain the consent of the AFSA before giving the proposal to the Nominee.

2.2. Statement of affairs for proposal

2.2.1 The Directors of the Company must, within 7 days after the day their proposal is given to the Nominee under rule 2.1 (Preparation of proposal etc.) or any longer time that the Nominee may allow, give the Nominee a statement of the Company’s affairs (the statement of affairs).

2.2.2 The statement of affairs must include particulars of the matters mentioned in Schedule 3 (Required content for statement of affairs).

2.2.3 The statement of affairs must be made up to a date not earlier than 2 weeks before the day the proposal is given to the Nominee. However, the Nominee may allow an extension of that period to the nearest practicable date (not earlier than 2 months before that day).

2.2.4 Two or more Directors of the Company (or, if the Company has only 1 Director, the Director) must certify that the statement of affairs is correct to the best of the Directors’ (or Director’s) knowledge and belief.

2.3. Nominee may ask for additional information in relation to proposal

The Nominee may ask the Directors oftheCompany to provide any additional information that the Nominee considers necessary. The Directors must take all reasonable steps to comply with the request.

2.4. Calling meetings for proposed Voluntary Arrangement

2.4.1 Notice of a meeting called by the Nominee under section 10 (Calling of meetings for Voluntary Arrangement proposal) of the AIFC Insolvency Regulations must be accompanied by the following:

1. (a) a copy of the Directors’ proposal;
2. (b) a copy of the statement of affairs given to the Nominee under rule 2.2 (Statement of affairs for proposal) or, if the Nominee considers appropriate, a summary of it;
3. (c) the Nominee’s comments on the proposal.

2.4.2 A summary under subrule 2.4.1(b) must include a list of creditors and the amounts of their debts.

2.5. Majority required at creditors meeting for proposed Voluntary Arrangement

At the meeting of the Company’s creditors called under section 10 (Calling of meetings for Voluntary Arrangement proposal) of the AIFC Insolvency Regulations, a resolution approving any proposal or modification is taken to have been passed only if it is passed by a majority of more than three-quarters in value of the creditors present in person or by Proxy and voting on the resolution

2.6. Handover of property to Supervisor etc.

2.6.1 If an approved Voluntary Arrangement for the Company takes effect under section 12 (Effect of approval of Voluntary Arrangement proposal) of the AIFC Insolvency Regulations, the Directors, and other Persons connected with the Company with power to do so, must immediately do everything necessary to give the Supervisor possession of the assets included in the Voluntary Arrangement and, if applicable, give the Supervisor control of any Excluded Property included in the Voluntary Arrangement.

2.6.2 If the Company is in liquidation, the Supervisor must on taking possession of the assets either discharge any amount due to the Liquidator by way of remuneration or on account of fees, costs, charges and expenses properly incurred and payable under the AIFC Insolvency Regulations or these Rules or, before taking possession, give the Liquidator a written undertaking to discharge any amount due out of the first realisation of assets.

2.6.3 The Supervisor has a Security Interest in the assets (other than any Excluded Property) included in the Voluntary Arrangement for payment of any amount due to the Liquidator, subject only to the deduction from realisations by the Supervisor of the proper costs and expenses of the realisations.

2.6.4 The Supervisor must, from time to time, out of the realisation of assets (other than any Excluded Property) discharge all guarantees properly given by the Liquidator for the benefit of the Company and must pay all of the Liquidator’s expenses.

2.7. Supervisor’s duties in relation to Excluded Property

2.7.1 If the Company’s assets or liabilities include Excluded Property, the Supervisor of the Voluntary Arrangement must comply with any requirements applying to the Company under the AIFC Personal Property Regulations or any AFSA Rules in relation to the Excluded Property.

2.7.2 Without limiting subrule 2.7.1, the Supervisor must comply with any instruction made under section 37 (Right of Transfer against insolvent Investment Intermediary) of the AIFC Personal Property Regulations.

2.8. Supervisor’s accounts and reports

2.8.1 The Supervisor of the Voluntary Arrangement for the Company must keep accounts and records of the Supervisor’s acts and dealings in and in connection with the Voluntary Arrangement, including records of all receipts and payments

2.8.2 The Supervisor must, not less often than once in every 12 months beginning with the date of the Supervisor’s appointment, prepare an abstract of all receipts and payments of the Supervisor in and in connection with the Voluntary Arrangement, and send copies of it, accompanied by the Supervisor’s comments on the progress and efficacy of the arrangement, to the following:

• (a) the Court;
• (b) the Registrar of Companies;
• (c) the Company;
• (d) all of the Company’s creditors who are bound by the arrangement;
• (e) the members of the Company who are bound by the arrangement;
• (f) if the Company is not in liquidation—the Company’s auditors.

2.8.3 However, if in any12-month period the Supervisor makes no payments, and has no receipts, in or in connection with the Voluntary Arrangement, the Supervisor must at the end of that period send a statement to that effect to all the Persons mentioned in subrule 2.8.2.

2.9. Fees, costs, charges and expenses for Voluntary Arrangement

The fees, costs, charges and expenses that may be incurred for any of the purposes of the Voluntary Arrangement are:

• (a) any disbursements made by the Nominee before the arrangement took effect, and any remuneration for the Nominee’s services agreed between the Nominee and the Company (or, as the case may be, the Administrator of the Company); and
• (b) any fees, costs, charges or expenses that:

(i) are in accordance with the terms of the arrangement; or

(ii) would be payable, or correspond to those that would be payable, in a winding up.

2.10. Completion or termination of Voluntary Arrangement

2.10.1 Not later than 28 days after the day of the completion or termination of the Voluntary Arrangement, the Supervisor must send to the creditors and members of the Company who were bound by it notice that the Voluntary Arrangement has been fully implemented or has terminated.

2.10.2 The notice must be accompanied by a copy of a report by the Supervisor summarising all receipts and payments made by the Supervisor in or in connection with the Voluntary Arrangement, explaining in relation to implementation of the arrangement any departure from the arrangement as it took effect, and, if the arrangement has terminated, explaining why the arrangement has terminated.

2.10.3 The Supervisor must, within the 28-day period mentioned in subrule 2.10.1, send a copy of the notice under that subrule and the report under subrule 2.10.2 to the Registrar of Companies and the Court.

2.10.4 The Supervisor may not vacate office until this rule has been complied with