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.
(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.
(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.
(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.