LML4806 - Company Law

What info must be contained in a compromise proposal? - - any proposals made "informally" by a company creditor - details of all assets and creditors - treatment of ongoing contracts - order of preference, proceeds apply - conditions precedent - number of employees - t&c of employment - projected balance sheet - income and expenses for 3 years - certificate by authorized director stating info is factual, accurate, up to date When will compromise be adopted and binding - - S155(6) adopted if supported by a majority in number representing at least 75% in value of creditors - A company may apply to court for an order approving the proposal - suggests it is not necessary for a company to obtain sanction of High Court before a compromise becomes binding on dissenting creditors Record date - - determines certain rights of shareholders - S59(1) a company may set a record date for purpose of determining which shareholders are entitled to receive the notice, vote etc - latest date by which the company is required to give notice to SH of the meeting, or date of action or event - board fail to set date, date is last day on which notice should be given to SH of SH meeting (public = 15 bdays; private = 10 bdays) Compromise - - agreement or arrangement or restructuring of claims between a company and its creditors in terms of which the creditors agree to accept less than their full claims against the company - binding on all companies creditors Compromise proposal is divided into three parts - - background - the proposal itself - assumptions and conditions How is proposal of compromise effected? - - by delivery of a copy of the proposal - and notice of a meeting to consider the proposal to the Companies Commission and to every creditor of the company or every member of the relevant class of creditors whose name and address is known or can reasonable be obtained by the company When is compromise proposal adopted - - when supported by a majority in number - representing at least 75% in value of creditors present & voting (or proxy) If a compromise is approved by court? - - company must file a copy of the order with Companies Commission within 5 business days - copy must be attache to each copy of Company MOI - order of court is final and binding on all creditors or class of creditors from the date on which a copy of the order is filed