Corporate Insolvency and Governance Act 2020

36 (1) Part 27 (mergers and divisions of public companies) is amended as follows. U.K.

(2) In section 903 (relationship of Part 27 to Part 26)—

(a) in the heading, for “Part 26” substitute “ Parts 26 and 26A ”;

(b) in subsection (1), for “Part 26 (arrangements and reconstructions)” substitute “ Part 26 (arrangements and reconstructions: general) or Part 26A (arrangements and reconstructions: companies in financial difficulty) ”;

(c) in subsections (2) and (3), for “Part 26” substitute “ Parts 26 and 26A ”.

(3) In section 907 (approval of members of merging companies), in subsection (2), after “917” insert “ , 917A ”.

(4) In section 908 (directors' explanatory report (merger))—

(a) in subsection (2), for paragraph (a) (but not the “and” following it) substitute—

“(a) the required statement explaining the effect of the compromise or arrangement,”;

(b) after that subsection insert—

“(2A) In subsection (2) “the required statement explaining the effect of the compromise or arrangement” means—

(a) in a case where a meeting is summoned under section 896 in relation to the compromise or arrangement, the statement required by section 897;

(b) in a case where a meeting is summoned under section 901C in relation to the compromise or arrangement, the statement required by section 901D.”

(5) In section 912 (approval of articles of new transferee company (merger))—

(a) the wording of the section becomes subsection (1) of that section;

(b) at the end of that subsection insert—

“This is subject to subsection (2).”;

(c) after that subsection insert—

“(2) In the case of a compromise or arrangement to be sanctioned under Part 26A, it is not necessary for the articles of the transferee company (or a draft of them) to be approved by ordinary resolution of the company in respect of which the compromise or arrangement is proposed.”

(6) In section 915 (circumstances in which certain particulars and reports not required (merger))—

(a) in subsection (3), for “Section 897” substitute “ In a case where a meeting has been summoned under section 896 in relation to the compromise or arrangement, section 897 ”;

(b) after that subsection insert—

“(3A) In a case where a meeting has been summoned under section 901C in relation to the compromise or arrangement, section 901D (explanatory statement to be circulated or made available) does not apply.”

(7) In section 915A (other circumstances in which reports and inspection not required (merger)), in subsection (5), after “section 900(2)” insert “ or, as the case may be, section 901J(2) ”.

(8) Before section 918 (but after the heading “Other exceptions”) insert—

“917A Other circumstances in which meeting of members of transferor company not required (merger)

In the case of a compromise or arrangement to be sanctioned under Part 26A, it is not necessary for the scheme to be approved by the members of the company in respect of which the compromise or arrangement is proposed.”

(9) In section 918A (agreement to dispense with reports etc (merger))—

(a) in subsection (2), for “the application to the court under section 896” substitute “ the relevant application ”;

(b) after that subsection insert—

“(3) In subsection (2) “the relevant application” means—

(a) in the case of a compromise or arrangement to be sanctioned under Part 26, the application to the court under section 896;

(b) in the case of a compromise or arrangement to be sanctioned under Part 26A, the application to the court under section 901C(1).”

(10) In section 922 (approval of members of companies involved in the division)—

(a) in subsection (1), for “compromise or arrangement” substitute “ scheme ”;

(b) in subsection (2), after “931” insert “ , 931A ”.

(11) In section 923 (directors' explanatory report (division))—

(a) in subsection (2), for paragraph (a) (but not the “and” following it) substitute—

“(a) the required statement explaining the effect of the compromise or arrangement,”;

(b) after that subsection insert—

“(2A) In subsection (2) “the required statement explaining the effect of the compromise or arrangement” means—

(a) in a case where a meeting is summoned under section 896 in relation to the compromise or arrangement, the statement required by section 897;

(b) in a case where a meeting is summoned under section 901C in relation to the compromise or arrangement, the statement required by section 901D.”

(12) In section 925 (supplementary accounting statement (division)), in subsection (1)(b), after “931” insert “ , 931A ”.

(13) In section 928 (approval of articles of new transferee company (division))—

(a) the wording of the section becomes subsection (1) of that section;

(b) after that subsection insert—

“(2) Subsection (1) does not apply in the case of a compromise or arrangement to be sanctioned under Part 26A.”

(14) Before section 932 (but after the heading “Other exceptions”) insert—

“931A Other circumstances in which meeting of members of transferor company not required (division)

In the case of a compromise or arrangement to be sanctioned under Part 26A, it is not necessary for the scheme to be approved by the members of the transferor company.”

(15) In section 933 (agreement to dispense with reports etc (division))—

(a) in subsection (3), for “the application to the court under section 896” substitute “ the relevant application ”;

(b) after that subsection insert—

“(4) In subsection (3) “the relevant application” means—

(a) in the case of a compromise or arrangement to be sanctioned under Part 26, the application to the court under section 896;

(b) in the case of a compromise or arrangement to be sanctioned under Part 26A, the application to the court under section 901C(1).”

(16) In section 939 (court to fix date for transfer of undertaking etc of transferor company), in subsection (1)(b), after “section 900” insert “ or, as the case may be, section 901J ”.

(17) In section 940 (liability of transferee companies for each other's defaults)—

(a) in subsection (2), after “If” insert “ , in the case of a compromise or arrangement to be sanctioned under Part 26, ”;

(b) after that subsection insert—

“(2A) If, in the case of a compromise or arrangement to be sanctioned under Part 26A, a number representing 75% in value of the creditors or any class of creditors of the transferor company, present and voting either in person or by proxy at a meeting summoned for the purposes of agreeing to the scheme, so agree, subsection (1) does not apply in relation to the liabilities owed to the creditors or that class of creditors.”