2022
COMPANY LAW (LML4806)
ASSIGNMENT 02 SOLUTIONS
SEMESTER 1, 2022
, QUESTION 1
Blueprint (Pty) Ltd specializes in the printing of textbooks. The current trend to move away
from publishing hard copies of textbooks towards publishing textbooks electronically is
threatening its future business prospects. Although Blueprint (Pty) Ltd is not yet in
financial distress, its board of directors is considering whether it can propose an
arrangement with the company’s creditors in terms of which the company will pay 80
percent of all creditors’ claims against it in full and final settlement of the claims. The board
anticipates that most of the creditors will accept its proposal and that only a small minority
of the creditors will reject it.
Advise the board of directors of Blueprint (Pty) on a specific procedure in terms of the
Companies Act 71 of 2008 that would make the board’s proposal in this case binding on
all creditors if the proposal is accepted by most of them, and indicate the requirements
and formalities that must be compiled with when implementing that procedure.
According to Section 155 of the Companies Act 71 of 2008, the board of a company may propose
an arrangement or a compromise of its financial obligations to all its creditors or to all the members
of any class of its creditors. A compromise is an 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. A compromise is binding on all the company’s creditors.
A company may effect a compromise with its creditors, or a specific class of creditors, whether
the company is in financial distress or not, unless it is in business rescue.
The board of a company or the liquidator of such a company if it is being wound up, may propose
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COMPANY LAW (LML4806)
ASSIGNMENT 02 SOLUTIONS
SEMESTER 1, 2022
, QUESTION 1
Blueprint (Pty) Ltd specializes in the printing of textbooks. The current trend to move away
from publishing hard copies of textbooks towards publishing textbooks electronically is
threatening its future business prospects. Although Blueprint (Pty) Ltd is not yet in
financial distress, its board of directors is considering whether it can propose an
arrangement with the company’s creditors in terms of which the company will pay 80
percent of all creditors’ claims against it in full and final settlement of the claims. The board
anticipates that most of the creditors will accept its proposal and that only a small minority
of the creditors will reject it.
Advise the board of directors of Blueprint (Pty) on a specific procedure in terms of the
Companies Act 71 of 2008 that would make the board’s proposal in this case binding on
all creditors if the proposal is accepted by most of them, and indicate the requirements
and formalities that must be compiled with when implementing that procedure.
According to Section 155 of the Companies Act 71 of 2008, the board of a company may propose
an arrangement or a compromise of its financial obligations to all its creditors or to all the members
of any class of its creditors. A compromise is an 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. A compromise is binding on all the company’s creditors.
A company may effect a compromise with its creditors, or a specific class of creditors, whether
the company is in financial distress or not, unless it is in business rescue.
The board of a company or the liquidator of such a company if it is being wound up, may propose
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