moratorium no steps may be taken ‘to repossess goods in the company’s possession under any hire purchase agreement except with the leave of the court. No other proceeding and no execution or other legal process may be commenced or continued and no distress may be levied against the company or its property except with the leave of the court.’123 This provision is based on Insolvency Act 1986 Schedule B1, paragraphs 43(3) and 43(6) dealing with the post-Enterprise Act administration order moratorium which, together with case law, makes it clear that the moratorium on enforcement applies to goods supplied on hire purchase or similar agreements (which include conditional sale agreements, chattel leasing agreements and retention of title agreements).124

Utility supplies to troubled companies are protected at present by section 233 of the Insolvency Act 1986 which governs the situations in which an administration order is made, an administrative receiver or provisional liquidator is appointed, a CVA is approved by meetings of the company and of creditors, or the company goes into liquidation. In these circumstances, where the office holder (administrator, administrative receiver and so on) requests that gas, electricity, water or telecommunications supplies be continued, the supplier may make it a condition of supply that the office holder personally guarantees payment of supplies, but that supplier shall not make it a condition of supply (or effectively make it a condition of supply) that any outstanding charges be paid. In the case of a CVA moratorium it would be appropriate to make such a provision effective at the time at which the CVA morator-

ium comes into force (when relevant documents are filed or lodged with the court).125

Expertise

The IP’s expertise in, and orientation to, rescue has already been discussed126 but consideration should be given to the CVA procedure and whether this is conducive to the making of informed and expert judgements on corporate rescues. Research into the operation of CVA procedures in the 1990s suggests that the expertise of IPs in operating CVA

123Insolvency Act 1986 Sch. A1, para. 12(1)(g) and (h).

124Hire purchase agreements and conditional sale agreements are defined in the Consumer Credit Act 1974 s. 189(1) (see Insolvency Act 1986 s. 436); and chattel leasing agreements and ROT agreements are defined in the Insolvency Act 1986 s. 251.

125Insolvency Act 1986 Sch. A1, paras. 7 and 8. 126 See ch. 5 above.

procedures may vary enormously. Flood and his colleagues suggested in 1995 that knowledge about CVA processes was very highly concentrated within the body of IPs: ‘three individuals’ names arose time and time again’. These were the key players and other IPs tended to have very modest experience or knowledge concerning CVA procedures.127 The rise of the rescue culture can be expected, however, to have significantly developed the orientation and experiences of IPs regarding the rescue potential of the CVA.128

If attention is focused, however, on the CVA process as a whole and its ability to deliver expert decisions, it should be remembered that this is not a procedure in which an IP lays down a judgement from on high. A CVA tends to involve an extended process of negotiation between the IP, the directors, the banks and other creditors. With this point in mind, a key issue is whether this is a negotiating process that is able to take on board the relevant information and produce sound decisions on rescue. One difficulty here may have stemmed, pre-rescue culture, from the widespread ignorance of professional lawyers, bankers and accountants concerning CVAs. A second problem may centre on the need to generate trust within CVA procedures. An important role of the IP is to develop such trust between different groups of creditors and the company directors. Without mutual confidence, even the best-informed, most astute commercial judgements will come to nothing. Of central importance here is faith in the competence of the management team and its ability to turn fortunes around.129 It follows that the expertise built into the CVA procedure will depend to a great extent on the skill not merely of the IP but also of the company’s directors. Nor can the part to be played by the major creditors be ignored: these are the parties who have to be convinced that a CVA will succeed. The major creditors have to possess the expertise in rescues that allows them to distinguish between good and less convincing CVA proposals.

Above all else then, the CVA demands a co-ordination of expertise. It is a procedure that might be thought to conduce to such co-ordination since the CVA provides a forum for discussion of the rescue scheme’s strengths and weaknesses. The quality of that discussion may, however,

127J. Flood, R. Abbey, E. Skordaki and P. Aber, The Professional Restructuring of Corporate Rescue: Company Voluntary Arrangements and the London Approach, ACCA Research Report 45 (ACCA, London, 1995) pp. 17–18.

128On the reorientation of the IP within the developing rescue culture see ch. 5 above.

129See Flood et al., Professional Restructuring, p. 19.