Conversion of Administration Into Creditors' Voluntary Liquidation – Scotland

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In Scotland, it is possible to convert an administration into creditors' voluntary liquidation.

The relevant legislation that governs this is:

The Insolvency Act 1986, Sch.B1 para.83 and

The Insolvency (Scotland) (Company Voluntary Arrangements and Administration) Rules 2018, Rule 3.60


If a Scottish administrator wishes to convert the administration into a CVL, then they do so by sending a “Paragraph 83 Notice” to the Register of Companies. I have attached the relevant style form.

The completed Notice with the Final Progress Report should also be sent to all those persons to whom notice of the administrator's appointment was delivered in addition to all creditors. This includes filing a copy of the same with the relevant court.

The person who ceases to be administrator on the registration of the notice must inform the person who becomes liquidator of anything which happens after the date of the final progress report and before the registration of the notice which the administrator would have included in the final report had it happened before the date of the report.

The liquidator shall be a person nominated by the creditors, or if no person is nominated the administrator. A person is nominated by the creditors as liquidator by—

(a) their approval of the statement of the proposed liquidator in the administrator's proposals or revised proposals; or

(b) their nomination of a different person, through a decision procedure, before their approval of the proposals or revised proposals.

Where the creditors nominate a different person, the nomination must, where applicable, include the declaration required by section 231.

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Governing Rules

A Scottish administrator can only utilise the above-noted process if:

each secured creditor of the company will receive payment in respect of his debt, and

that a distribution will be made to unsecured creditors (if there are any) which is not a distribution by virtue of section 176A(2)(a).

At MBM, we specialise in insolvency law. Contact us on 0131 226 8200 to speak to one of our expert lawyers today. We will be more than happy to have an initial no-cost chat to see if we can help.

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