PART 26A

Arrangements and reconstructions: companies in financial difficulty

Court sanction for compromise or arrangement

Court sanction for compromise or arrangement
901F
1
If a number representing 75% 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 summoned under section 901C, agree a compromise or arrangement, the court may, on an application under this section, sanction the compromise or arrangement.
2
Subsection (1) is subject to—
a
section 901G (sanction for compromise or arrangement where one or more classes dissent), and
b
section 901H (moratorium debts, etc).
3
An application under this section may be made by—
a
the company,
b
any creditor or member of the company,
c
if the company is being wound up, the liquidator, or
d
if the company is in administration, the administrator.
4
Where the court makes an order under this section in relation to a company that is in administration or is being wound up, the court may by the order—
a
provide for the appointment of the administrator or liquidator to cease to have effect;
b
stay or sist all proceedings in the administration or the winding up;
c
impose any requirements with respect to the conduct of the administration or the winding up which the court thinks appropriate for facilitating the compromise or arrangement.
5
A compromise or arrangement sanctioned by the court is binding—
a
on all creditors or the class of creditors or on the members or class of members (as the case may be), and
b
on the company or, in the case of a company in the course of being wound up, the liquidator and contributories of the company.
6
The court’s order has no effect until a copy of it has been—
a
in the case of an overseas company that is not required to register particulars under section 1046, published in the Gazette, or
b
in any other case, delivered to the registrar.
Pts. 1-39 modified (31.12.2020) by Regulation (EC) No. 2157/2001, Art. AAA1(3) (as inserted by The European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2018 (S.I. 2018/1298), regs. 1, 97 (with regs. 140-145) (as amended by S.I. 2020/523, regs. 1(2), 5(a)-(f)); 2020 c. 1, Sch. 5 para. 1(1))
Pts. 26, 26A applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 55-63 (with reg. 64)
Ss. 901A-901J applied (with modifications) (16.2.2021) by S.I. 2009/1804, reg. 45A (as inserted by The Limited Liability Partnerships (Amendment etc.) Regulations 2021 (S.I. 2021/60), reg. 1(1), Sch. 3 para. 3 (with reg. 4(2)))
Pt. 26A applied (with modifications) by S.I. 2014/229, art. 2(4), Sch. 2A (as inserted (18.7.2020) by The Co-operative and Community Benefit Societies and Credit Unions (Arrangements, Reconstructions and Administration) (Amendment) and Consequential Amendments Order 2020 (S.I. 2020/744), arts. 1, 7(c), 12)
Pt. 26A inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 9 para. 1 (with ss. 2(2), 5(2))
Ss. 901A-901J applied (with modifications) by S.I. 2009/1804, reg. 45A (as inserted (26.6.2020) by The Limited Liability Partnerships (Amendment etc.) Regulations 2020 (S.I. 2020/643), reg. 1(1), Sch. 3 para. 3 (which amending S.I. is revoked (16.2.2021) by S.I. 2021/60, reg. 1(1), 2))