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Section 310 of Insolvency Act CAP 53: Conduct of creditors' meeting: consideration of debtor's proposal

    

(1) The main purpose of a creditors' meeting convened under section 309 is to decide whether to approve the debtor's proposal (with or without modifications).
(2) At the beginning of the meeting, those creditors present shall elect one of their number to be Chairperson of the meeting.
(3) The Chairperson shall then divide the meeting into three groups for voting purposes, with the first group comprising secured creditors (if any), the second group comprising preferential creditors (if any) and the third group comprising unsecured creditors.
(4) A modification to the debtor's proposal may be approved only if the debtor consents to it.
(5) A modification to the debtor's proposal may be one that provides for the provisional supervisor to be replaced by another authorised insolvency practitioner to perform the functions of supervisor of that proposal if it is approved and takes effect as a voluntary arrangement.
(6) However, a modification to the debtor's proposal may not be one as a result of which it is no longer a proposal as defined by section 303.
(7) If the proposal or a modification to it affects the right of a secured creditor of the debtor to enforce the creditor's security, the proposal or modification may not be approved unless— (a) the creditor consents to it; or
(b) if the creditor does not consent to it, the creditor—
(i) would be in a position no worse than if the debtor were adjudged bankrupt;
(ii) would receive no less from the assets to which the creditor's security relates, or from their proceeds of sale, than any other secured creditor having a security interest in those assets that has the same priority as the creditor's; and
(iii) would be paid in full from those assets, or their proceeds of sale, before any payment from them or their proceeds is made to any other creditor whose security interest in them is ranked below that of the creditor, or who has no security interest in them.
(8) Subject to this section, the meeting is to be conducted in accordance with the rules (if any) prescribed by the insolvency regulations.
(9) The meeting may at any time resolve that it be adjourned, or further adjourned.
(10) As soon as practicable after the conclusion of the meeting, the Chairperson—
(a) shall report the result of of the meeting to the Court; and
(b) immediately after doing so, shall give notice of the result of the meeting to all persons to whom the notice convening the meeting was sent.
(11) If the report is to the effect that the meeting has decided not to approve the debtor's proposal (either with or without modifications), the Court shall discharge any interim order that has effect in relation to the debtor.

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