Explanatory note

This Order sets out the method of calculation of the prescribed part referred to in section 176A of the Insolvency Act 1986 (c. 45), which was inserted into that Act by section 251 of the Enterprise Act 2002 (c. 40). The prescribed part is a part of the insolvency estate of a company which, but for section 176A, would have been available to the holders of debentures secured by floating charges. From the coming into force of section 176A and this Order, the amount of money reflecting the prescribed part as calculated by virtue of this Order will need to be set aside to satisfy the claims of unsecured creditors under the section.