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Companies - Approval Of Arrangements, Amalgamations And Compromises By Court (Ss 239-243)

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239.   Interpretation

            In this Part, unless the context otherwise requires -

            "arrangement" includes a reorganisation of the share capital of a company by the consolidation of shares of different classes, or by the division of shares into shares of different classes, or by both those methods;

            "company" means-

     (a)     a company within the meaning of section 2; or

     (b)     an external company that is registered on the register of external companies.

            "creditor" includes-

     (a)     a person who, in a liquidation, would be entitled to claim that a debt is owing to that person by the company; and

     (b)     a secured creditor.

240.   Approval of arrangements, amalgamation and compromises

            (1) Notwithstanding the provisions of this Act or the constitution of a company, the court may, on the application of a company or, with the leave of the court, any shareholder or creditor of a company, order that an arrangement or amalgamation or compromise shall be binding on the company and on such other persons or classes of persons as the court may specify and any such order may be made on such terms and conditions as the court considers appropriate.

            (2) Before making an order under subsection (1), the court may, on the application of the company or any shareholder or creditor or other person who appears to the court to be interested, or of its own motion, make any one or more of the following orders-

     (a)     an order that notice of the application, together with such information relating to it as the court considers appropriate, be given in such form and in such manner and to such persons or classes of persons as the court may specify;

     (b)     an order directing the holding of a meeting or meetings of shareholders or any class of shareholders or creditors or any class of creditors of a company to consider and, if thought fit, to approve, the proposed arrangement or amalgamation or compromise in such manner as the court may specify and, for that purpose, may determine the shareholders or creditors that constitute a class of shareholders or creditors of a company;

     (c)     an order requiring that a report on the proposed arrangement or amalgamation or compromise be prepared for the court by a person specified by the court and, if the court considers appropriate, be supplied to the shareholders or any class of shareholders or creditors or any class of creditors of a company or to any other person who appears to the court to be interested;

     (d)     an order as to the payment of the costs incurred in the preparation of any such report; or

     (e)     an order specifying the persons who shall be entitled to appear and be heard on the application to approve the arrangement or amalgamation or compromise.

            (3) An order made under this section has effect on and from the date specified in the order.

            (4) Within 10 working days of an order being made by the court, the Board of the company shall ensure that a copy of the order is delivered to the Registrar for registration.

            (5) If the Board of a company fails to comply with subsection (4), every director of the company shall be guilty of an offence and liable to the penalty set out in section 492(1).

241.   Court may make additional orders

            (1) Without limiting section 240, the court may, for the purpose of giving effect to any arrangement or amalgamation or compromise approved under that section, either by the order approving the arrangement or amalgamation or compromise, or by any subsequent order, provide for, and prescribe terms and conditions relating to-

     (a)     the transfer or vesting of real or personal property, assets, rights, powers, interests, liabilities, contracts, and engagements;

     (b)     the issue of shares, securities, or policies of any kind;

     (c)     the continuation of legal proceedings;

     (d)     the liquidation of any company;

     (e)     the provisions to be made for persons who voted against the arrangement or amalgamation or compromise at any meeting called in accordance with any order made under subsection (2)(b) of that section or who appeared before the court in opposition to the application to approve the arrangement or amalgamation or compromise; and

     (f)      such other matters that are necessary or desirable to give effect to the arrangement or amalgamation or compromise.

            (2) Within 10 working days of an order being made by the court, the Board of the company shall ensure that a copy of the order is delivered to the Registrar for registration.

            (3) If the Board of a company fails to comply with subsection (2), every director of the company shall be guilty of an offence and liable to the penalty set out in section 492(1).

242.   Court may approve amalgamation or compromise

            The court may-

     (a)     approve an amalgamation under section 240 even though the amalgamation could be effected under Part XIII; or

     (b)     approve a compromise under section 240 even though the compromise could be approved under Part XIV.

243.   Application of section 237

            The provisions of section 237 shall apply with such modifications as may be necessary in relation to any compromise approved under section 240.