PART 5 63.—(1) This Part only applies in a case that involves a compromise or an arrangement between a company and its creditors or any class of those creditors.| (2) Except as provided in sections 69, 70 and 71, this Part does not derogate from sections 210 and 211 of the Companies Act 1967. |
| (3) In this Part, “company” means any corporation liable to be wound up under this Act, but excludes such company or class of companies as the Minister may by order in the Gazette prescribe. |
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| Power of Court to restrain proceedings, etc., against company |
64.—(1) Where a company proposes, or intends to propose, a compromise or an arrangement between the company and its creditors or any class of those creditors, the Court may, on the application of the company, make one or more of the following orders, each of which is in force for such period as the Court thinks fit:| (a) | an order restraining the passing of a resolution for the winding up of the company; | | (b) | an order restraining the appointment of a receiver or manager over any property or undertaking of the company; | | (c) | an order restraining the commencement or continuation of any proceedings (other than proceedings under section 210 or 212 of the Companies Act 1967, or this section or section 66, 69 or 70) against the company, except with the permission of the Court and subject to such terms as the Court imposes; [Act 25 of 2021 wef 01/04/2022] | | (d) | an order restraining the issuance, continuation or execution of any enforcement order or other legal process, or the levying of any distress, against any property of the company, except with the permission of the Court and subject to such terms as the Court imposes; [Act 25 of 2021 wef 01/04/2022] | | (e) | an order restraining the taking of any step to enforce any security over any property of the company, or to repossess any goods held by the company under any chattels leasing agreement, hire‑purchase agreement or retention of title agreement, except with the permission of the Court and subject to such terms as the Court imposes; [Act 25 of 2021 wef 01/04/2022] | | (f) | an order restraining the enforcement of any right of re‑entry or forfeiture under any lease in respect of any premises occupied by the company (including any enforcement pursuant to section 18 or 18A of the Conveyancing and Law of Property Act 1886), except with the permission of the Court and subject to such terms as the Court imposes. [Act 25 of 2021 wef 01/04/2022] |
(2) The company may make the application under subsection (1) only if all of the following conditions are satisfied:| (a) | no order has been made and no resolution has been passed for the winding up of the company; | | (b) | the company makes, or undertakes to the Court to make as soon as practicable —| (i) | an application under section 210(1) of the Companies Act 1967 for the Court to order to be summoned a meeting of the creditors or class of creditors in relation to the compromise or arrangement mentioned in subsection (1); or | | (ii) | an application under section 71(1) to approve the compromise or arrangement mentioned in subsection (1); |
| | (c) | the company does not make an application under section 210(10) of the Companies Act 1967. |
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(3) When the company makes the application under subsection (1) to the Court —| (a) | the company must publish a notice of the application in the Gazette and in at least one English local daily newspaper, and send a copy of the notice published in the Gazette to the Registrar of Companies; and | | (b) | unless the Court orders otherwise, the company must send a notice of the application to each creditor meant to be bound by the intended or proposed compromise or arrangement and who is known to the company. |
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(4) The company must file the following with the Court together with the application under subsection (1):| (a) | evidence of support from the company’s creditors for the intended or proposed compromise or arrangement, together with an explanation of how such support would be important for the success of the intended or proposed compromise or arrangement; | | (b) | in a case where the company has not proposed the compromise or arrangement to the creditors or class of creditors yet, a brief description of the intended compromise or arrangement, containing sufficient particulars to enable the Court to assess whether the intended compromise or arrangement is feasible and merits consideration by the company’s creditors when a statement mentioned in section 211(1)(a) of the Companies Act 1967 or section 71(3)(a) relating to the intended compromise or arrangement is placed before those creditors; | | (c) | a list of every secured creditor of the company; | | (d) | a list of all unsecured creditors who are not related to the company or, if there are more than 20 such unsecured creditors, a list of the 20 such unsecured creditors whose claims against the company are the largest among all such unsecured creditors. |
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(5) An order of the Court under subsection (1) —| (a) | may be made subject to such terms as the Court imposes; and | | (b) | may be expressed to apply to any act of any person in Singapore or within the jurisdiction of the Court, whether the act takes place in Singapore or elsewhere. |
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(6) When making an order under subsection (1), the Court must order the company to submit to the Court, within such time as the Court may specify, sufficient information relating to the company’s financial affairs to enable the company’s creditors to assess the feasibility of the intended or proposed compromise or arrangement, including such of the following information as the Court may specify:| (a) | a report on the valuation of each of the company’s significant assets; | | (b) | if the company acquires or disposes of any property or grants security over any property — information relating to the acquisition, disposal or grant of security, such information to be submitted not later than 14 days after the date of the acquisition, disposal or grant of security; | | (c) | periodic financial reports of the company and the company’s subsidiaries; | | (d) | forecasts of the profitability, and the cash flow from the operations, of the company and the company’s subsidiaries. |
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| (7) The Court may make an order extending the period for which an order under subsection (1) is in force, if an application for the extension of the period is made by the company before the expiry of that period. |
(8) Subject to subsection (9), during the automatic moratorium period for an application under subsection (1) by a company —| (a) | no order may be made, and no resolution may be passed, for the winding up of the company; | | (b) | no receiver or manager may be appointed over any property or undertaking of the company; | | (c) | no proceedings (other than proceedings under section 210 or 212 of the Companies Act 1967, or this section or section 66, 69 or 70) may be commenced or continued against the company, except with the permission of the Court and subject to such terms as the Court imposes; [Act 25 of 2021 wef 01/04/2022] | | (d) | no enforcement order or other legal process may be issued, continued or executed, and no distress may be levied, against any property of the company, except with the permission of the Court and subject to such terms as the Court imposes; [Act 25 of 2021 wef 01/04/2022] | | (e) | no step may be taken to enforce any security over any property of the company, or to repossess any goods under any chattels leasing agreement, hire‑purchase agreement or retention of title agreement, except with the permission of the Court and subject to such terms as the Court imposes; and [Act 25 of 2021 wef 01/04/2022] | | (f) | despite sections 18 and 18A of the Conveyancing and Law of Property Act 1886, no right of re‑entry or forfeiture under any lease in respect of any premises occupied by the company may be enforced, except with the permission of the Court and subject to such terms as the Court imposes. [Act 25 of 2021 wef 01/04/2022] |
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| (9) Subsection (8) does not apply to a company that makes an application under subsection (1) if, within the period of 12 months immediately before the date on which that application is made, the company made an earlier application under subsection (1) to which subsection (8) applied. |
(10) The company, any creditor of the company, or any receiver and manager of the whole (or substantially the whole) of the property or undertaking of the company, may apply to the Court for —| (a) | an order discharging or varying any order made under subsection (1); or | | (b) | an order that subsection (8), or any paragraph of that subsection that is specified in the order, does not apply to the company starting on the date of the order. |
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| (11) The Court must grant an application under subsection (10) by a creditor of a company, or by a receiver and manager of the whole (or substantially the whole) of the property or undertaking of a company, if the company failed to comply with subsection (4) when making the application under subsection (1) for the order under subsection (1), and the Court may impose such terms when granting the application under subsection (10) as the Court thinks fit. |
(12) Neither an order made by the Court under subsection (1) nor subsection (8) affects —| (a) | the exercise of any legal right under any arrangement (including a set‑off arrangement or a netting arrangement) that may be prescribed by regulations; or | | (b) | the commencement or continuation of any proceedings that may be prescribed by regulations. |
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| (13) The company must, within 14 days after the date of an order made under subsection (1), (7) or (10), lodge a copy of the order with the Registrar of Companies. |
(14) In this section —“automatic moratorium period”, in relation to an application under subsection (1), means the period starting on the date on which the application is made, and ending on the earlier of the following:| (a) | a date that is 30 days after the date on which the application is made; | | (b) | the date on which the application is decided by the Court; |
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| “chattels leasing agreement”, “hire-purchase agreement” and “retention of title agreement” have the meanings given by section 88(1). |
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| Power of Court to restrain proceedings, etc., against subsidiary or holding company |
65.—(1) Where the Court has made an order under section 64(1) in relation to a company (called in this section the subject company), the Court may, on the application of a company that is a subsidiary, a holding company or an ultimate holding company of the subject company (called in this section the related company), make one or more of the following orders, each of which is in force for such period (but not exceeding the period for which the order under section 64(1) is in force) as the Court thinks fit:| (a) | an order restraining the passing of a resolution for the winding up of the related company; | | (b) | an order restraining the appointment of a receiver or manager over any property or undertaking of the related company; | | (c) | an order restraining the commencement or continuation of any proceedings (other than proceedings under section 210 or 212 of the Companies Act 1967 or this section or section 66, 69 or 70) against the related company, except with the permission of the Court and subject to such terms as the Court imposes; [Act 25 of 2021 wef 01/04/2022] | | (d) | an order restraining the issuance, continuation or execution of any enforcement order or other legal process, or the levying of any distress, against any property of the related company, except with the permission of the Court and subject to such terms as the Court imposes; [Act 25 of 2021 wef 01/04/2022] | | (e) | an order restraining the taking of any step to enforce any security over any property of the related company, or to repossess any goods held by the related company under any chattels leasing agreement, hire‑purchase agreement or retention of title agreement, except with the permission of the Court and subject to such terms as the Court imposes; [Act 25 of 2021 wef 01/04/2022] | | (f) | an order restraining the enforcement of any right of re‑entry or forfeiture under any lease in respect of any premises occupied by the related company (including any enforcement pursuant to section 18 or 18A of the Conveyancing and Law of Property Act 1886), except with the permission of the Court and subject to such terms as the Court imposes. [Act 25 of 2021 wef 01/04/2022] |
(2) The related company may make the application under subsection (1) only if all of the following conditions are satisfied:| (a) | no order has been made and no resolution has been passed for the winding up of the related company; | | (b) | the order under section 64(1) made in relation to the subject company is in force; | | (c) | the related company plays a necessary and integral role in the compromise or arrangement relied on by the subject company to make the application for the order under section 64(1); | | (d) | the compromise or arrangement mentioned in paragraph (c) will be frustrated if one or more of the actions that may be restrained by an order under subsection (1) are taken against the related company; | | (e) | the Court is satisfied that the creditors of the related company will not be unfairly prejudiced by the making of an order under subsection (1). |
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(3) When the related company makes the application under subsection (1) to the Court —| (a) | the related company must publish a notice of the application in the Gazette and in at least one English local daily newspaper, and send a copy of the notice published in the Gazette to the Registrar of Companies; and | | (b) | unless the Court orders otherwise, the related company must send a notice of the application to each creditor of the related company who will be affected by an order under subsection (1) and who is known to the related company. |
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(4) An order of the Court under subsection (1) —| (a) | may be made subject to such terms as the Court imposes; and | | (b) | may be expressed to apply to any act of any person in Singapore or within the jurisdiction of the Court, whether the act takes place in Singapore or elsewhere. |
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| (5) The Court may make an order extending the period for which an order under subsection (1) is in force, if an application for the extension of the period is made by the related company before the expiry of that period. |
| (6) The related company, any creditor of the related company, or any receiver and manager of the whole (or substantially the whole) of the property or undertaking of the related company, may apply to the Court for an order discharging or varying any order made under subsection (1). |
(7) An order made by the Court under subsection (1) does not affect —| (a) | the exercise of any legal right under any arrangement (including a set‑off arrangement or a netting arrangement) that may be prescribed by regulations; or | | (b) | the commencement or continuation of any proceedings that may be prescribed by regulations. |
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| (8) The related company must, within 14 days after the date of an order made under subsection (1), (5) or (6), lodge a copy of the order with the Registrar of Companies. |
| (9) In this section, “chattels leasing agreement”, “hire‑purchase agreement” and “retention of title agreement” have the meanings given by section 88(1). |
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| Restraint of disposition of property, etc., during moratorium period |
66.—(1) The Court may, on an application made by any creditor of a relevant company at any time during a moratorium period, make either or both of the following orders, each of which is in force for such part of the moratorium period as the Court thinks fit:| (a) | an order restraining the relevant company from disposing of the property of the relevant company other than in good faith and in the ordinary course of the business of the relevant company; | | (b) | an order restraining the relevant company from transferring any share in, or altering the rights of any member of, the relevant company. |
(2) In this section —“moratorium period”, in relation to a relevant company, means any of the following periods that is applicable to the company:| (a) | the automatic moratorium period mentioned in section 64(8); | | (b) | the period during which an order under section 64(1) is in force, including any extension of that period under section 64(7); | | (c) | the period during which an order under section 65(1) is in force, including any extension of that period under section 65(5); |
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| “relevant company” means a company that has made an application under section 64(1), or in relation to which an order under section 65(1) is made. |
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| Super priority for rescue financing |
67.—(1) Where a company has made an application under section 210(1) of the Companies Act 1967 or section 64(1), the Court may, on an application by the company under this subsection, make one or more of the following orders:| (a) | an order that if the company is wound up, the debt arising from any rescue financing obtained, or to be obtained, by the company is to be treated as if it were part of the costs and expenses of the winding up mentioned in section 203(1)(b); | | (b) | an order that if the company is wound up, the debt arising from any rescue financing obtained, or to be obtained, by the company is to have priority over all the preferential debts specified in section 203(1)(a) to (i) and all other unsecured debts, if the company would not have been able to obtain the rescue financing from any person unless the debt arising from the rescue financing is given the priority mentioned in this paragraph; | | (c) | an order that the debt arising from any rescue financing to be obtained by the company is to be secured by —| (i) | a security interest on property of the company that is not otherwise subject to any security interest; or | | (ii) | a subordinate security interest on property of the company that is subject to an existing security interest, |
| if the company would not have been able to obtain the rescue financing from any person unless the debt arising from the rescue financing is secured in the manner mentioned in this paragraph; |
| | (d) | an order that the debt arising from any rescue financing to be obtained by the company is to be secured by a security interest, on property of the company that is subject to an existing security interest, of the same priority as or a higher priority than that existing security interest, if —| (i) | the company would not have been able to obtain the rescue financing from any person unless the debt arising from the rescue financing is secured in the manner mentioned in this paragraph; and | | (ii) | there is adequate protection for the interests of the holder of that existing security interest. |
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| (2) A company that makes an application under subsection (1) must, unless the Court orders otherwise, send a notice of the application to each creditor of the company. |
(3) Where a company that has 2 or more super priority debts is wound up, the super priority debts —| (a) | rank equally in priority between themselves; and | | (b) | are to be paid in full or, if the company has insufficient property to meet them, are to abate in equal proportions between themselves. |
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(4) Where a company that has any super priority debt or debts is wound up, the super priority debt or debts constitute one class of debts and, despite section 203 —| (a) | the super priority debt or debts are to be paid in priority to all the preferential debts specified in section 203(1)(a) to (i) and all other unsecured debts; and | | (b) | if the property of the company available for the payment of the super priority debt or debts is insufficient to meet the super priority debt or debts, the super priority debt or debts —| (i) | have priority over the claims of the holders of any debentures of the company secured by a floating charge (which, as created, was a floating charge); and | | (ii) | are to be paid out of any property comprised in or subject to that floating charge. |
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| (5) The reversal or modification on appeal of an order under subsection (1)(c) or (d) does not affect the validity of any debt so incurred, or any security interest that was granted pursuant to the order, or the priority of that security interest, if the rescue financing (from which arose the debt intended to be secured by that security interest) was provided in good faith, whether or not with knowledge of the appeal, unless the order was stayed pending the appeal before the rescue financing was provided. |
(6) For the purposes of subsection (1)(d)(ii), there is adequate protection for the interests of the holder of an existing security interest on the property of a company, if —| (a) | the Court orders the company to make one or more cash payments to the holder, the total amount of which is sufficient to compensate the holder for any decrease in the value of the holder’s existing security interest that may result from the making of the order under subsection (1)(d); | | (b) | the Court orders the company to provide to the holder additional or replacement security of a value sufficient to compensate the holder for any decrease in the value of the holder’s existing security interest that may result from the making of the order under subsection (1)(d); or | | (c) | the Court grants any relief (other than compensation) that will result in the realisation by the holder of the indubitable equivalent of the holder’s existing security interest. |
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| (7) Sections 205, 224, 225 and 228 do not affect any priority conferred, any security interest or relief granted, or any payment made, pursuant to and in accordance with an order made by the Court under subsection (1). |
| (8) The company must, within 14 days after the date of an order made under subsection (1), lodge a copy of the order with the Registrar of Companies. |
(9) In this section —“rescue financing” means any financing that satisfies either or both of the following conditions:| (a) | the financing is necessary for the survival of a company that obtains the financing, or of the whole or any part of the undertaking of that company, as a going concern; | | (b) | the financing is necessary to achieve a more advantageous realisation of the assets of a company that obtains the financing, than on a winding up of that company; |
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| “security interest” means any mortgage, charge, pledge, lien or other type of security interest recognised by law; |
| “super priority debt” means a debt, arising from any rescue financing obtained or to be obtained by a company, that is to have priority, pursuant to an order under subsection (1)(b), over all the preferential debts specified in section 203(1)(a) to (i) and all other unsecured debts, if the company is wound up. |
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| Filing, inspection and adjudication of proofs of debt |
68.—(1) Where the Court orders under section 210(1) of the Companies Act 1967 a meeting of the creditors, or a class of creditors, of a company to be summoned, the company must state in every notice mentioned in section 211(1) of that Act summoning the meeting (called in this section the notice summoning the meeting) —| (a) | the manner in which a creditor is to file a proof of debt with the company; and | | (b) | the period within which the proof is to be filed. |
| (2) Subject to subsection (3), if a creditor does not file the creditor’s proof of debt in the manner and within the period stated in the notice summoning the meeting, the creditor is not allowed to vote (whether in person or by proxy) at the meeting. |
| (3) The Court may, on an application made by the company or a creditor, make an order extending the period stated in the notice summoning the meeting within which a proof of debt is to be filed. |
| (4) Upon the making of an order under subsection (3), the company must as soon as practicable send a notice of the order to each creditor meant to be bound by the compromise or arrangement. |
| (5) Every proof of debt filed under this section is to be adjudicated by the person who is appointed by the Court to serve as the chairperson of the meeting summoned pursuant to the order made under section 210(1) of the Companies Act 1967 (called in this section the chairperson). |
| (6) A creditor who has filed a proof of debt under this section is entitled to inspect the whole or any part of a proof of debt filed by any other creditor, except a part of the other creditor’s proof that contains information that is subject to any obligation as to secrecy, or to any other restriction upon the disclosure of information, imposed by any written law, rule of law, contract or rule of professional conduct, or by any person or authority under any written law. |
| (7) The chairperson must inform each creditor who has filed a proof of debt, within such time and manner as may be prescribed, of the results of the adjudication of the proofs of debt filed by all creditors. |
(8) A creditor (A) who has filed a proof of debt may object to one or more of the following:| (a) | the rejection by the chairperson of the whole or any part of A’s proof of debt; | | (b) | the admission by the chairperson of the whole or any part of a proof of debt filed by another creditor; | | (c) | a request by another creditor to inspect the whole or any part of A’s proof of debt. |
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(9) Any dispute between the chairperson and the company, between the chairperson and one or more creditors in relation to the rejection of a proof of debt, or between 2 or more creditors in relation to the inspection or admission of a proof of debt, may be adjudicated by an independent assessor appointed —| (a) | by the agreement of all parties to the dispute; or | | (b) | if there is no such agreement, by the Court on the application of —| (i) | any party to the dispute; or | | (ii) | the company (whether or not a party to the dispute). |
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| (10) Where a creditor, the company or the chairperson disagrees with any decision of an independent assessor on an adjudication under subsection (9) in relation to the inspection, admission or rejection of a proof of debt, the creditor, company or chairperson (as the case may be) may file a notice of disagreement regarding that decision for consideration by the Court when the Court hears an application for the Court’s approval under section 210(4) of the Companies Act 1967 of the compromise or arrangement in question. |
| (11) When exercising its discretion under section 210(4) of the Companies Act 1967, the Court must take into account any notice of disagreement filed under subsection (10). |
| (12) The Minister may make regulations to provide for the procedure relating to the inspection and adjudication of proofs of debt filed by creditors under this section. |
(13) Without limiting subsection (12), the regulations mentioned in that subsection may provide for the following matters:| (a) | the procedures for the making of a request, by a creditor who has filed a proof of debt, to inspect a proof of debt filed by any other creditor, and for the objection to the request by that other creditor; | | (b) | the period within which a proof of debt is to be adjudicated by the chairperson; | | (c) | the time and manner in which creditors are to be informed under subsection (7) of the results of the adjudication; | | (d) | the procedure relating to the resolution of any dispute mentioned in subsection (9). |
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(14) Despite anything in the regulations mentioned in subsection (12), the Court may —| (a) | on an application by the company, approve any variation in or substitution of the procedure relating to the inspection and adjudication of proofs of debt filed by creditors under this section; and | | (b) | on an application by any person subject to any requirement imposed by the regulations, grant relief to the person or extend the time for the person to comply with the requirement. |
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| Power of Court to order re‑vote |
69.—(1) At the hearing of an application for the Court’s approval under section 210(4) of the Companies Act 1967 of a compromise or an arrangement between a company and its creditors or any class of those creditors, the Court may order the company to hold another meeting of the creditors or class of creditors (called in this section the further meeting) for the purpose of putting the compromise or arrangement to a re‑vote.(2) When making an order under subsection (1), the Court may —| (a) | make the order subject to such terms as the Court thinks fit; | | (b) | direct that the further meeting be summoned or held in such manner as the Court thinks fit; and | | (c) | make such orders or directions as the Court thinks appropriate in respect of one or more of the following matters:| (i) | the classification of any creditor for the purposes of voting at the further meeting; | | (ii) | the quantum of any creditor’s debt that is to be admitted for the purposes of voting at the further meeting; | | (iii) | the weight to be attached to the vote of any creditor at the further meeting. |
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| Power of Court to cram down |
70.—(1) This section applies where —| (a) | a compromise or an arrangement between a company and its creditors or any class of those creditors has been voted on at a relevant meeting; | | (b) | the creditors meant to be bound by the compromise or arrangement are placed in 2 or more classes of creditors for the purposes of voting on the compromise or arrangement at the relevant meeting; | | (c) | the conditions in section 210(3AB)(a) and (b) of the Companies Act 1967 (insofar as they are applicable) are satisfied at the relevant meeting in respect of at least one class of creditors; and | | (d) | either or both of the conditions in section 210(3AB)(a) and (b) of the Companies Act 1967 (insofar as they are applicable) are not satisfied at the relevant meeting in respect of at least one class of creditors (each called in this section a dissenting class). |
| (2) Despite section 210(3AA) and (3AB)(a) and (b) of the Companies Act 1967, the Court may, subject to this section and on the application of the company, or of a creditor of the company who has obtained the permission of the Court to make an application under this subsection, approve the compromise or arrangement, and order that the compromise or arrangement be binding on the company and all classes of creditors meant to be bound by the compromise or arrangement. [Act 25 of 2021 wef 01/04/2022] |
(3) The Court may not make an order under subsection (2) unless —| (a) | a majority in number of the creditors meant to be bound by the compromise or arrangement, and who were present and voting (either in person or by proxy) at the relevant meeting, have agreed to the compromise or arrangement; | | (b) | the majority in number of creditors mentioned in paragraph (a) represents three‑fourths in value of the creditors meant to be bound by the compromise or arrangement, and who were present and voting (either in person or by proxy) at the relevant meeting; and | | (c) | the Court is satisfied that the compromise or arrangement does not discriminate unfairly between 2 or more classes of creditors, and is fair and equitable to each dissenting class. |
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(4) For the purposes of subsection (3)(c), a compromise or an arrangement is not fair and equitable to a dissenting class unless —| (a) | no creditor in the dissenting class receives, under the terms of the compromise or arrangement, an amount that is lower than what the creditor is estimated by the Court to receive in the most likely scenario if the compromise or arrangement does not become binding on the company and all classes of creditors meant to be bound by the compromise or arrangement; and | | (b) | either of the following applies:| (i) | where the creditors in the dissenting class are secured creditors, the terms of the compromise or arrangement —| (A) | must provide for each creditor in the dissenting class to receive deferred cash payments totalling the amount of the creditor’s claim that is secured by the security held by the creditor, and preserve that security and the extent of that claim (whether or not the property subject to that security is to be retained by the company or transferred to another entity under the terms of the compromise or arrangement); | | (B) | must provide that where the security held by any creditor in the dissenting class to secure the creditor’s claim is to be realised by the company free of encumbrances, the creditor has a charge over the proceeds of the realisation to satisfy the creditor’s claim that is secured by that security; or | | (C) | must provide that each creditor in the dissenting class is entitled to realise the indubitable equivalent of the security held by the creditor in order to satisfy the creditor’s claim that is secured by that security; |
| | (ii) | where the creditors in the dissenting class are unsecured creditors, the terms of the compromise or arrangement —| (A) | must provide for each creditor in that class to receive property of a value equal to the amount of the creditor’s claim; or | | (B) | must not provide for any creditor with a claim that is subordinate to the claim of a creditor in the dissenting class, or any member, to receive or retain any property of the company on account of the subordinate claim or the member’s interest. |
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| (5) The Court may appoint any person of suitable knowledge, qualification or experience to assist the Court in estimating the amount that a creditor is expected to receive in the most likely scenario if the compromise or arrangement does not become binding on the company and all classes of creditors meant to be bound by the compromise or arrangement. |
(6) In this section, “relevant meeting” means —| (a) | in a case where the compromise or arrangement in question is subject to a re‑vote under section 69(1), the meeting held for that purpose; or | | (b) | in any other case, the meeting ordered by the Court under section 210(1) of the Companies Act 1967 or, if that meeting is adjourned under section 210(3) of that Act, the adjourned meeting. |
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| Power of Court to approve compromise or arrangement without meeting of creditors |
71.—(1) Despite section 210 of the Companies Act 1967 but subject to this section, where a compromise or an arrangement is proposed between a company and its creditors or any class of those creditors, the Court may, on an application made by the company, make an order approving the compromise or arrangement, even though no meeting of the creditors or class of creditors has been ordered under section 210(1) of that Act or held.| (2) Subject to subsection (10), if the compromise or arrangement is approved by order of the Court under subsection (1), the compromise or arrangement is binding on the company and the creditors or class of creditors meant to be bound by the compromise or arrangement. |
(3) The Court must not approve a compromise or an arrangement under subsection (1) unless —| (a) | the company has provided each creditor meant to be bound by the compromise or arrangement with a statement that complies with subsection (6) and contains the following information:| (i) | information concerning the company’s property, assets, business activities, financial condition and prospects; | | (ii) | information on the manner in which the terms of the compromise or arrangement will, if it takes effect, affect the rights of the creditor; | | (iii) | such other information as is necessary to enable the creditor to make an informed decision whether to agree to the compromise or arrangement; |
| | (b) | the company has published a notice of the application under subsection (1) in the Gazette and in at least one English local daily newspaper, and has sent a copy of the notice published in the Gazette to the Registrar of Companies; | | (c) | the company has sent a notice and a copy of the application under subsection (1) to each creditor meant to be bound by the compromise or arrangement; and | | (d) | the Court is satisfied that had a meeting of the creditors or class of creditors been summoned, the conditions in section 210(3AB)(a) and (b) of the Companies Act 1967 (insofar as they relate to the creditors or class of creditors) would have been satisfied. |
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| (4) Despite subsection (3)(c), the company may, if directed by the Court, give notice of the application under subsection (1) to the creditors or class of creditors in such manner as the Court may direct. |
| (5) The Court may grant its approval of a compromise or an arrangement subject to such alterations or conditions as the Court thinks just. |
(6) The statement mentioned in subsection (3)(a) must —| (a) | explain the effect of the compromise or arrangement and, in particular, state —| (i) | any material interests of the directors of the company (whether as directors or as members, creditors or holders of units of shares of the company or otherwise); and | | (ii) | the effect that the compromise or arrangement has on those interests, insofar as that effect is different from the effect that the compromise or arrangement has on the like interests of other persons; and |
| | (b) | where the compromise or arrangement affects the rights of debenture holders, contain the like explanation with respect to the trustees for the debenture holders as, under paragraph (a), the statement is required to give with respect to the directors of the company. |
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| (7) Each director, and each trustee for debenture holders, must give notice to the company of such matters relating to the director or trustee as may be necessary for the purposes of subsection (6) within 7 days after the director or trustee receives a request in writing from the company for information as to such matters. |
| (8) Any director of a company or trustee for debenture holders who contravenes subsection (7) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 12 months. |
| (9) A person, being a director of a company or a trustee for debenture holders, is not guilty of an offence under subsection (8), if the person shows that the person’s contravention of subsection (7) was due to the refusal of another director of the company or trustee for debenture holders to supply to the person the particulars of the person’s material interests affected by the compromise or arrangement. |
(10) Unless the Court orders otherwise, an order made under subsection (1) —| (a) | has no effect until a copy of the order is lodged with the Registrar of Companies; and | | (b) | takes effect starting on the date of the lodgment. |
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| (11) Where the terms of any compromise or arrangement approved under this section provide for any money or other consideration to be held by or on behalf of any party to the compromise or arrangement in trust for any person, the person holding the money or other consideration may after the expiration of 2 years, and must before the expiration of 10 years, starting on the date on which the money or other consideration was received by the person, transfer the money or other consideration to the Official Receiver. |
(12) The Official Receiver must —| (a) | deal with any moneys received under subsection (11) as if the moneys were paid to the Official Receiver under section 197; and | | (b) | sell or dispose of any other consideration received under subsection (11) in such manner as the Official Receiver thinks fit, and deal with the proceeds of the sale or disposal as if those proceeds were moneys paid to the Official Receiver under section 197. |
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| Power of Court to review act, omission or decision, etc., after approval, etc., of compromise or arrangement |
72.—(1) This section applies after a compromise or an arrangement, between a company and its creditors or any class of those creditors, has been approved by the Court under section 210(4) of the Companies Act 1967 or section 71(1).(2) Where the Court is satisfied that the company or the scheme manager of the scheme of arrangement has committed an act or omission, or made a decision, that results in a breach of any term of the scheme of arrangement, the Court may, on the application of the company, the scheme manager or any creditor bound by the scheme of arrangement —| (a) | reverse or modify the act or decision of the company or the scheme manager; or | | (b) | give such direction or make such order as the Court thinks fit to rectify the act, omission or decision of the company or scheme manager. |
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| (3) The Court may, on an application of the company, the scheme manager or any creditor bound by the scheme of arrangement, clarify any term of the scheme of arrangement. |
| (4) No order or clarification made, and no direction given, by the Court under subsection (2) or (3) may alter, or affect any person’s rights under, the terms of the compromise or arrangement as approved by the Court under section 210(4) of the Companies Act 1967 or section 71(1). |
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