F10Order repealed (prosp.) by Companies Act 2006 (c. 46), ss. 1284(2), 1295, 1300(2), Sch. 16 and the repeal being partly in force, as to which see individual Articles (with savings (with adaptations) by Companies Act 2006 (Commencement No. 6, Saving and Commencement Nos. 3 and 5 (Amendment)) Order 2008 (S.I. 2008/674), arts. 2(3), {4}, Sch. 2) and subject to amendments (6.4.2008) by Companies Act 2006 (Consequential Amendments etc) Order 2008 (S.I. 2008/948), arts. 2(2), 3(1)(b)(2), Sch. 1 paras. 135, 147, 148 {Sch. 2 Note 1} (with arts. 6, 11, 12) and subject to amendments (6.4.2008) by S.R. 2008/133, {regs. 2, 3}
418.—(1) Where a compromise or arrangement is proposed between a company and its creditors, or any class of them, or between the company and its members, or any class of them, the court may on the application of the company or any creditor or member of it or, in the case of a company being wound up[F1 or[F2in administration], of the liquidator or administrator], order a meeting of the creditors or class of creditors, or of the members of the company or class of members (as the case may be), to be summoned in such manner as the court directs.
(2) If a majority in number representing three-fourths in value of the creditors or class of creditors or members or class of members (as the case may be), present and voting either in person or by proxy at the meeting, agree to any compromise or arrangement, the compromise or arrangement, if sanctioned by the court, is binding on all the creditors or the class of creditors, or on the members or class of members (as the case may be), and also on the company or, in the case of a company in the course of being wound up, on the liquidator and contributories of the company.
(3 )F3 The court's order under paragraph (2) has no effect until an office copy of it has been delivered to the registrar for registration; and a copy of every such order shall be annexed to every copy of the company's memorandum issued after the order has been made or, in the case of a company not having a memorandum, of every copy so issued of the instrument constituting the company or defining its constitution.
(4) If a company makes default in complying with paragraph (3), the company and every officer of it who is in default is liable to a fine.
(5 )F3 In this Article and Article 419—
(a)“company” means any company liable to be wound up under this Order, and
(b)“arrangement” includes a reorganisation of the company's share capital by the consolidation of shares of different classes or by the division of shares into shares of different classes, or by both of those methods.
F2Words in art. 418(1) substituted (27.3.2006) by Insolvency (Northern Ireland) Order 2005 (S.I. 2005/1455 (N.I. 10)), arts. 1(3), 3(3), Sch. 2 para. 14; S.R. 2006/21, art. 2 (with S.R. 2006/22, arts. 2-7)
F3mod. by SR 2004/307
419.—(1) This Article applies where a meeting of creditors or any class of creditors, or of members or any class of members, is summoned under Article 418.
(2 )F4 With every notice summoning the meeting which is sent to a creditor or member there shall be sent also a statement explaining the effect of the compromise or arrangement and in particular state any material interests of the directors of the company (whether as directors or as members or as creditors of the company or otherwise) and the effect on those interests of the compromise or arrangement, in so far as it is different from the effect on the like interests of other persons.
(3) In every notice summoning the meeting which is given by advertisement there shall be included either such a statement as is mentioned in paragraph (2) or a notification of the place at which, and the manner in which, creditors or members entitled to attend the meeting may obtain copies of the statement.
(4) Where the compromise or arrangement affects the rights of debenture holders of the company, the statement shall give the like explanation as respects the trustees of any deed for securing the issue of the debentures as it is required to give as respects the company's directors.
(5) Where a notice given by advertisement includes a notification that copies of a statement explaining the effect of the compromise or arrangement proposed can be obtained by creditors or members entitled to attend the meeting, every such creditor or member shall, on making application in the manner indicated by the notice, be furnished by the company free of charge with a copy of the statement.
(6) If a company makes default in complying with any requirement of this Article, the company and every officer of it who is in default is liable to a fine; and for this purpose a liquidator[F5 or administrator] of the company and a trustee of a deed for securing the issue of debentures of the company is deemed an officer of it.
However, a person is not liable under this paragraph if he shows that the default was due to the refusal of another person, being a director or trustee for debenture holders, to supply the necessary particulars of his interests.
(7) It is the duty of any director of the company, and of any trustee for its debenture holders, to give notice to the company of such matters relating to himself as may be necessary for the purposes of this Article; and any person who makes default in complying with this paragraph is liable to a fine.
F4mod. by SR 2004/307
420.—(1) This Article applies where application is made to the court under Article 418 for the sanctioning of a compromise or arrangement proposed between a company and any such persons as are mentioned in that Article.
(2) If it is shown—
(a)that the compromise or arrangement has been proposed for the purposes of, or in connection with, a scheme for the reconstruction of any company or companies, or the amalgamation of any two or more companies, and
(b)that under the scheme the whole or any part of the undertaking or the property of any company concerned in the scheme ( “a transferor company”) is to be transferred to another company ( “the transferee company”),
the court may, either by the order sanctioning the compromise or arrangement or by any subsequent order, make provision for all or any of the following matters.
(3) The matters for which the court's order may make provision are—
(a)the transfer to the transferee company or the whole or any part of the undertaking and of the property or liabilities of any transferor company,
(b )F6the allotting or appropriation by the transferee company of any shares, debentures, policies or other like interests in that company which under the compromise or arrangement are to be allotted or appropriated by that company to or for any person,
(c)the continuation by or against the transferee company of any legal proceedings pending by or against any transferor company,
(d)the dissolution, without winding up, of any transferor company,
(e)the provision to be made for any persons who, within such time and in such manner as the court directs, dissent from the compromise or arrangement,
(f)such incidental, consequential and supplemental matters as are necessary to secure that the reconstruction or amalgamation is fully and effectively carried out.
(4) If an order under this Article provides for the transfer of property or liabilities, then—
(a)that property is by virtue of the order transferred to, and vests in, the transferee company, and
(b)those liabilities are, by virtue of the order, transferred to and become liabilities of that company;
and property (if the order so directs) vests freed from any charge which is by virtue of the compromise or arrangement to cease to have effect.
(5) Where an order is made under this Article, every company in relation to which the order is made shall cause an office copy of the order to be delivered to the registrar for registration within 7 days after its making; and if default is made in complying with this paragraph, the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
(6 )F6 In this Article “property” includes property, rights and powers of every description; “liabilities” includes duties and “company” includes only a company as defined in Article 3(1).
F6mod. by SR 2004/307
420A.—(1) Where—
(a)a compromise or arrangement is proposed between a public company and any such persons as are mentioned in Article 418(1) for the purposes of, or in connection with, a scheme for the reconstruction of any company or companies or the amalgation of any two or more companies,
(b)the circumstances are as specified in any of the Cases described in paragraph (2), and
(c)the consideration for the transfer or each of the transfers envisaged in the Case in question is to be shares in the transferee company or any of the transferee companies receivable by members of the transferor company or transferor companies, with or without any cash payment to members,
Articles 418 to 420 shall, as regards that compromise or arrangement, have effect subject to the provisions of this Article and Schedule[F8 15B].
(2) The cases referred to in paragraph (1) are as follows—
Where under the scheme the undertaking, property and liabilities of the company in respect of which the compromise or arrangement in question is proposed are to be transferred to another public company, other than one formed for the purpose of, or in connection with, the scheme.
Where under the scheme the undertaking, property and liabilities of each of two or more public companies concerned in the scheme, including the company in respect of which the compromise or arrangement in question is proposed, are to be transferred to a company (whether or not a public company) formed for the purpose of, or in connection with, the scheme.
Where under the scheme the undertaking, property and liabilities of the company in respect of which the compromise or arrangement in question is proposed are to be divided among and transferred to two or more companies each of which is either—
(a)a public company, or
(b)a company (whether or not a public company) formed for the purposes of, or in connection with, the scheme.
(3) Before sanctioning any compromise or arrangement under Article 418(2) the court may, on the application of any pre-existing transferee company or any member or creditor of it or,[F9where the company is in administration], the administrator, order a meeting of the members of the company or any class of them or of the creditors of the company or any class of them to be summoned in such manner as the court directs.
(4) This Article does not apply where the company in respect of which the compromise or arrangement is proposed is being wound-up.
(5) This Article does not apply to compromises or arrangements in respect of which an application has been made to the court for an order under Article 418(1) before 1st January 1988.
(6) Where Article 420 would apply in the case of a scheme but for the fact that the transferee company or any of the transferee companies is a company within the meaning of section 735(1) of the Companies Act 1985 (and thus not within the definition of “company” in Article 420(6)), Article 420 shall apply notwithstanding that fact.
(7) In the case of a scheme mentioned in paragraph (1), for a company within the meaning of section 735(1) of the Companies Act 1985, the reference in Article 420(5) to the registrar shall have effect as a reference to the registrar of companies as defined in section 744 of that Act.
(8) In this Article and Schedule[F8 15B]
“transferor company” means a company whose undertaking, property and liabilities are to be transferred by means of a transferor envisaged in any of the Cases specified in paragraph (2);
“transferee company” means a company to which a transfer envisaged in any of those Cases is to be made;
“pre-existing transferee company” means a transferee company other than one formed for the purpose of, or in connection with, the scheme;
“compromise or arrangement” means a compromise or arrangement to which paragraph (1) applies;
“the scheme” means the scheme mentioned in paragraph (1)(a);
“company” includes only a company as defined in Article 3(1) except that, in the case of a transferee company, it also includes a company as defined in section 735(1) of the Companies Act 1985 (referred to in these definitions as a “Great Britain company”);
“public company” means, in relation to a transferee company which is a Great Britain company, a public company within the meaning of section 1(3) of the Companies Act 1985;
“registrar” means, in relation to a transferee company which is a Great Britain company, the registrar of companies as defined in section 744 of the Companies Act 1985;
“the Gazette” means the Belfast Gazette or, in relation to a transferee comapny which is a Great Britain company, the Gazette as defined in section 744 of the Companies Act 1985;
“Case 1 Scheme”, “Case 2 Scheme” and “Case 3 Scheme” mean a scheme of the kind described in Cases 1, 2 and 3 of paragraph (2) respectively;
“property” and “liabilities” have the same meaning as in Article 420;
“administrator” means a person appointed as defined in section 8(2) of the Insolvency Act 1986; and
“administration order” means an order of the court under section 8 of that Act.]
F9Words in art. 420A(3) substituted (27.3.2006) by Insolvency (Northern Ireland) Order 2005 (S.I. 2005/1455 (N.I. 10)), arts. 1(3), 3(3), Sch. 2 para. 15; S.R. 2006/21, art. 2 (with S.R. 2006/22, arts. 2-7)