2.1 General provisions about Preferential Debts

2.1.1 This rule applies in relation to the insolvency of a Company.

2.1.2 The Company’s Preferential Debts must be paid in priority to:

• (a) all debts secured by a Security Interest over all or substantially all of the undertaking of the Company; and
• (b) all unsecured debts.

2.1.3 The Company’s Preferential Debts rank equally among themselves after the expenses of the Insolvency Proceedings and must be paid in full, unless the Company’s assets are insufficient to meet them. If the Company’s assets are insufficient, the Preferential Debts abate in equal proportions.

2.1.4 So far as the assets of the Company available for payment of general creditors are insufficient to meet the Company’s Preferential Debts, the Preferential Debts have priority over the claims secured by a Security Interest over all or substantially all of the undertaking of the Company, and must be paid accordingly out of any property included in or subject to that Security Interest.

2.2 Payments to Directors and Officers

2.2.1 Despite anything in these Rules, a Director or Officer of the Company is not entitled to receive an amount payable under these Rules if the Court so orders. The Court may make an order on the application of an Administrator of the Company or on its own initiative if there is an outstanding claim against the Director or Officer in relation to the Company’s Insolvency.

2.2.2 An amount payable to a Director or Officer of the Company is not a Preferential Debt if and to the extent that the Court decides that the Director or Officer is fully or partially responsible for the Company’s Insolvency.