- Section 630 of Insolvency Act CAP 53: Approved proposal to take effect as voluntary arrangement and to be binding on company and its creditors
(1) A directors' proposal (with or without modifications) takes effect as a voluntary arrangement by the company on the day after the date on which it is approved by the Court by order made under section 629(7)(a) or on such later date as may be specified in the order.
(2) On taking effect, a...
- Section 631 of Insolvency Act CAP 53: Certain persons may challenge decisions relating to approved voluntary arrangement by making application to the Court
(1) The following persons may make an application to the Court for an order under this section—
(a) a person who was entitled to vote at the meeting of the company or the meeting of its creditors;
(b) a person who would have been so entitled if the person had had notice of the relevant...
- Section 632 of Insolvency Act CAP 53: Offences involving false representations and fraudulent acts by company officers
(1) An officer of a company who—
(a) makes a false representation for the purpose of obtaining the approval of the members or creditors of a company to a proposal for a voluntary arrangement; or
(b) fraudulently does, or omits to do, any act for that purpose, commits an offence and on conviction...
- Section 633 of Insolvency Act CAP 53: Implementation of approved voluntary arrangement
(1) When a proposal takes effect as a voluntary arrangement, the supervisor becomes responsible for implementing the arrangement in the interests of the company and its creditors and monitoring compliance by the company with the terms of the arrangement.
(2) If, in relation to a voluntary...
- Section 634 of Insolvency Act CAP 53: Prosecution of delinquent officers of company
(1) This section applies if—
(a) a moratorium under has been obtained for a company under this Division; or
(b) the approval of a voluntary arrangement in relation to a company has taken effect under section 630 or 666.
(2) If it appears to the supervisor that any past or present officer of the...
- Section 635 of Insolvency Act CAP 53: When voluntary arrangement comes to an end prematurely
For the purposes of this Division, a voluntary arrangement the approval of which has taken effect under section 630(1) ends prematurely if, when it ceases to have effect, it has not been fully implemented in respect of all persons bound by the arrangement because of section 630(2).
- Section 636 of Insolvency Act CAP 53: Interpretation: Part 2
(1) In this Part—
"agreement" includes an agreement or undertaking effected by contract, deed or any other document intended to have effect in accordance with the law of Kenya or another jurisdiction; "beginning of the moratorium" has the meaning given by section 645(1);
"lodgement date" means the...
- Section 637 of Insolvency Act CAP 53: Application of Part 2
This Division has effect with respect to— (a) companies eligible for a moratorium;
(b) the procedure for obtaining such a moratorium;
(c) the effects of such a moratorium; and (d) deleted by Act No. 1 of 2021.
- Section 638 of Insolvency Act CAP 53: Eligible companies
A company is eligible to obtain a moratorium if it—
(a) complies with such requirements (if any) as may be prescribed by the insolvency regulations;
(b) is not declared to be an ineligible company by another provision of this Part; and (c) is financially distressed.
- Section 639 of Insolvency Act CAP 53: Banking and insurance companies ineligible to obtain moratorium
The following companies are ineligible companies for the purposes of section 638:
(a) a company that holds a licence granted under section 5 of the Banking Act (Cap. 488) authorising it to carry on a banking business, a financial business or the business of a mortgage finance company; (b) a company...
- Section 640 of Insolvency Act CAP 53: Companies under administration, etc., ineligible to obtain moratorium
(1) The following companies are also ineligible companies for the purpose of section 638—
(a) a company that is under administration;
(b) a company that is in liquidation;
(c) a company in respect of which a voluntary arrangement already has effect;
(d) a company in respect of which a...
- Section 641 of Insolvency Act CAP 53: Certain projects companies ineligible
(1) A company is also an ineligible company for the purposes of section 638 if, on the lodgement date, it is a project company of a project that is a public-private partnership project and includes step-in rights.
(2) In subsection (1), "public-private partnership project" means a project—
(a) the...
- Section 643 of Insolvency Act CAP 53: What steps company's directors have to take to obtain a moratorium
(1) Deleted by Act No. 1 of 2021
(2) If the directors of an eligible company wish to obtain a moratorium, they shall— (a) prepare—
(i) a document setting out why a moratorium is desirable, which may include evidence that it will assist in agreeing an informal restructuring or other agreement with...
- Section 644 of Insolvency Act CAP 53: What directors have to do to obtain moratorium
(1) To obtain a moratorium, the directors of a company shall lodge with the Court—
(a) the documents referred to in section 643(2)(a);
(b) a statement to the effect that the company is eligible for a moratorium and the basis of that eligibility;
(c) a statement from the monitor that the monitor...
- Section 645 of Insolvency Act CAP 53: Duration of moratorium
(1) A moratorium takes effect when the documents specified in section 644(1) are lodged with the Court.
(2) A moratorium ends after thirty days from and including the day on which the moratorium takes effect, unless the moratorium period is extended under section 669.
(3) Deleted by Act No. 1 of...
- Section 646 of Insolvency Act CAP 53: What happens when moratorium takes effect
(1) When a moratorium takes effect in respect of a company, the directors of the company shall immediately give notice of that fact to the monitor.
(2) If subsection (1) is not complied with, each of the directors who is in default commits an offence and on conviction is liable to a fine not...
- Section 647 of Insolvency Act CAP 53: Duty of monitor to publish and give notice that moratorium has taken effect
(1) As soon as practicable after being notified that a moratorium has taken effect, the monitor shall— (a) publish—
(i) once in the Gazette;
(ii) once in at least two newspapers circulating in the area in which the company has its principal place of business in Kenya; and
(iii) on the company's...
- Section 648 of Insolvency Act CAP 53: Notification of end of moratorium to be given by monitor
(1) Within fourteen days after a moratorium has come to an end, the monitor shall— (a) publish—
(i) once in the Gazette;
(ii) once in at least two newspapers circulating in area in which the company has its principal place of business in Kenya; and
(iii) on the company's website (if any), a...
- Section 649 of Insolvency Act CAP 53: Effect of moratorium on creditors and others
(1) While a moratorium has effect in respect of a company—
(a) an application for liquidation of the company may not be made; (b) a meeting of the company may be convened or requisitioned—
(i) only with the consent of the monitor or with the approval of the Court; and
(ii) if the Court gives...
- Section 651 of Insolvency Act CAP 53: Security not to be enforced unless it would benefit the company
Security given by a company at a time when a moratorium has effect in relation to the company can be enforced only if, at that time, reasonable grounds existed for believing that the security would benefit the company.
- Section 652 of Insolvency Act CAP 53: Application of sections 653 to 657 to company in respect of which a moratorium has effect
(1) Sections 653 to 657 apply to a company in respect of which a moratorium currently has effect.
(2) The fact that a company enters into a transaction in contravention of a provision of sections 653 to
657 does not of itself—
(a) render the transaction void; or
(b) make it unenforceable against...
- Section 653 of Insolvency Act CAP 53: Company invoices and other documents to state monitor's name and that moratorium has effect
(1) A company in respect of which a moratorium has effect shall ensure that every invoice, order for goods or services, business letter or order form (whether in hard copy, electronic or any other form) issued by or on behalf of the company, and all the company's websites, specifies— (a) the...
- Section 654 of Insolvency Act CAP 53: Restrictions on company obtaining credit during moratorium
(1) A company in respect of which a moratorium has effect may not obtain credit exceeding twentyfive thousand shillings from a person who has not been informed that a moratorium has effect in respect of the company.
(2) The reference to the company obtaining credit includes (but is not limited to)...
- Section 655 of Insolvency Act CAP 53: Restrictions on disposal of property and making payments by company
(1) Subject to subsection (2), a company in respect of which a moratorium has effect may dispose of any of its property only if—
(a) there are reasonable grounds for believing that the disposal will benefit the company; and (b) the disposal is approved by the monitor.
(2) Subsection (1) does not...
- Section 656 of Insolvency Act CAP 53: Restriction on company paying debts and other liabilities
(1) Subject to subsection (2), a company in respect of which a moratorium has effect may make a payment in respect of a debt or other liability of the company that was in existence before the beginning of the moratorium only if—
(a) there are reasonable grounds for believing that the payment will...
- Section 657 of Insolvency Act CAP 53: Circumstances in which company may dispose of property and goods that are subject to a security or held under credit purchase transaction
(1) This section applies to—
(a) property of the company that is subject to a security; and
(b) goods that are in the possession of the company under a credit purchase transaction.
(2) A company may transfer property to that is subject to a security as if it were not subject to the security, but...
- Section 658 of Insolvency Act CAP 53: Monitor's to monitor activities of company during moratorium
(1) During the moratorium, the monitor is responsible for monitoring the company's activities in order to ascertain whether the company is likely to have sufficient funds available to it during the remainder of the moratorium to enable it to continue to carry on its business.
(2) On being requested...
- Section 659 of Insolvency Act CAP 53: Withdrawal of monitor's consent to act
(1) Except with the approval of the Court, a provisional supervisor may withdraw consent to monitor a moratorium only if, during the moratorium—
(a) the monitor concludes that the company will not have sufficient funds available to it during the remainder of the moratorium to enable it to continue...
- Section 660 of Insolvency Act CAP 53: Creditors and others may challenge monitor's conduct during moratorium by application made to the Court
(1) Any creditor, director or member of the company, or any other person affected by a moratorium, who is dissatisfied with an act, omission or decision of the monitor during the moratorium may apply to the Court for an order under subsection (3).
(2) An application may be made during the...
- Section 661 of Insolvency Act CAP 53: Creditor may pursue claim against monitor for loss
(1) If there are reasonable grounds for believing that—
(a) as a result of any act, omission or decision of the monitor during the moratorium, the company has sustained loss; and
(b) the company does not intend to pursue any claim it may have against that monitor, any creditor of the company may...