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Section 629 of Insolvency Act CAP 53: Approval of proposal for voluntary arrangement

    

(1) This section applies to the decisions taken at the meeting of the company and the meeting of the company's creditors held in accordance with section 628 to consider a directors' proposal (with or without modifications).
(2) The proposal (including any modifications) is approved if— (a) it is a approved—
(i) by a majority the members of the company present (either in person or by proxy) at the meeting of the company; and
(ii) by a majority (in number and value) of the members of each group of creditors present
(either in person or by proxy) at the meeting of creditors; or
(b) if, despite not being not approved by a majority of the members referred to in paragraph (a) (i), it is approved by a majority (in number and value) of the members of each of the groups of creditors referred to in paragraph (a)(ii).
(3) For the purposes only of deciding whether the requisite majority by value has voted in favour of a resolution to approve the proposal—
(a) the Chairperson of the meeting may— (i) admit or reject proofs of debt; and
(ii) adjourn the meeting in, order to admit or reject proofs of debt; and
(b) a person whose debt has been admitted is a creditor.
(4) At any time before the deadline for making an application under this subsection, any member of the company, or any creditor, who attended or was entitled to attend the meetings may make an application to the Court for an order under subsection (7).
(5) The deadline for making an application under subsection (4) is—
(a) the expiry of thirty days after the holding of the meetings of the company and its creditors
(or if the meetings were held on different days, the later of the meetings); or (b) if the Court extends that period, the expiry of the extended period.
(6) Any member of the company, and any creditor, who attended or was entitled to attend the meetings is entitled to appear and be heard at the hearing of the application even if the member or creditor is not the applicant. The right conferred by this subsection may be exercised by such a member or creditor irrespective of whether the member or creditor supports or has an interest in the implementation of the proposal.
(7) On the hearing of an application made under subsection (4), the Court may—
(a) make an order approving the proposal (with or without the modifications (if any) put to the meetings in accordance with section 628); or
(b) make such other order as it considers appropriate.
(8) The Court may make an order under subsection (7)(a) even if the proposal (or a modification to it)— (a) was not approved at the company meeting; or
(b) was not approved at the creditors' meeting by a majority of the preferential creditors' group or the unsecured creditors' group, but do so only if the proposal (or the modification)—
(i) has been approved by a majority of the secured creditors' group;
(ii) does not discriminate among the members of the dissenting group or groups of creditors and ensures that they will be no worse off than they would have been if the company had been liquidated; and
(iii) respects the priorities of preferential creditors over unsecured creditors.

« Previous:   Section 628 - Conduct of meetings of company and its creditors          Next: »   Section 630 - Approved proposal to take effect as voluntary arrangement and to be binding on company and its creditors

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