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8 Corporate Recovery - Winding Up, Receivership and Judicial Management

8 Corporate Recovery - Winding Up, Receivership and Judicial Management

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Published by: api-3803117 on Oct 17, 2008
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03/18/2014

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-• Control & custody of assets
-• Management powers as governed by the articles & memorandum of association
-• Summon meetings of creditors to approve proposals
-Implement proposal

oMake proposals in writing
oTo have creditors vote and approve the proposal
oIf creditors approve, then have to go to court to get sanction
oOnly then, can the JM implement the proposal

-• Exercise powers under the companies act and the 11th

schedule

Proposals

-From date of appointment, have 60 days to send proposals to
oRegistrar of Companies
oCreditors
oShareholders
-Approval is by creditors majority in number and value
oif the company owes the creditors $10M, and there is no way can pay the creditors in full under the
proposals… the JM may tell the creditors that they will pay them in 3 years 80%, and have to wait for
rest of 20%
omay in 3-5 years… all the money
oWhere you have a scheme under s210, require majority in number and ¾ in value
-Modifications – have to go back to the court
oCos when implementing original proposal, had to have court’s sanction, hence, when modifications are
substantial, have to go back to the court

Approval of proposals

(1)If the creditors do not give the requisite approval, then go to court for directions
ocan tell the creditors that if they do not agree to the JM proposal and the company goes into liquidation,
they may only get 10c to $1
obut if go into JM, may get up to 50c to $1
(2)Implementation of proposals if approved
(3)Revision of proposal

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