INS10171 - Introduction to Voluntary Arrangements

There are no overriding reasons for rejection

Occasionally exceptional reasons will cause us to decline proposals. Examples might include

• deliberate fault or evasion of statutory liabilities or past association with contrived insolvency
• operating a policy of withholding payment of Crown money
• any proposal that requires sale of HMRC debt or does not provide cash
• failure to meet any obligations under a prior voluntary arrangement
• exclusion of creditors who are entitled to receive the same treatment as all others within their class
• a purchaser assuming responsibility for payment of some of the debtor’s debts in consideration for the purchase of the debtor’s assets
• any proposal by any member of any organisation that requires debts owed to its members, to be paid in full, whether inside or outside the arrangement or before or after the completion of the arrangement when all other unsecured creditors will become bound to accept a compromise of their debt. Here ‘members' includes any prescribed associate(s) or other creditor(s) specified by the organisation
• failure to allay VAS concerns about the proposal or show adequate provision for all future statutory liabilities as they arise
• applying ‘security’ or commencing criminal proceedings is actively being considered.

Operating a policy of withholding payment of Crown monies is not just simply a matter of non- payment. There will be evidence that the debtor has

• paid other creditors first
• funded their business or lifestyle by consistently withholding Crown monies
• largely debt owing to the Crown.

If a debtor has submitted false accounts or returns and been subject to enquiry, then this may put approval in doubt although there are degrees of culpability ( INS10261).

At the very least it will suggest that the debtor's proposal may be unreliable.