• PART 25 PART 25 ARRANGEMENTS AND RECONSTRUCTIONS

    • 801. Application of this part

      (1) The provisions of this Part apply where a compromise or arrangement is proposed between a company and—
      (a) its creditors, or any class of them, or
      (b) its members, or any class of them.
      (2) In this Part—

      "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, and

      "company", unless the context otherwise requires, means—
      (a) in section 806 (powers of Court to facilitate reconstruction or amalgamation or merger or division):
      (i) in the case of a compromise or arrangement falling within section 806(1)(a) or 806(1)(c), a company formed or registered under these Regulations, and
      (ii) in the case of a compromise or arrangement falling within section 806(1)(b), a company formed or registered under these Regulations and any non-ADGM company whose jurisdiction of incorporation permits such non-ADGM company to merge into a single company or body corporate or into a new company (or to become such a new company) as described in section 810(1)(a) or 810(1)(b), and
      (b) elsewhere in this Part, any company liable to be wound up under the Insolvency Regulations 2015 and any non-ADGM company whose jurisdiction of incorporation permits such non-ADGM company to merge into a single company or body corporate or into a new company (or to become such a new company) as described in section 810(1)(a) or 810(1)(b).
      (3) The provisions of this Part have effect subject to Part 26 (mergers and divisions) where that Part applies (see sections 808 and 809).

    • 802. Court order for holding of meeting

      (1) The Court may, on an application under this section, 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) 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.
      (3) Section 341 (representation of corporations at meetings) applies to a meeting of creditors under this section as to a meeting of the company (references to a member of the company being read as references to a creditor).

    • 803. Statement to be circulated or made available

      (1) Where a meeting is summoned under section 802
      (a) every notice summoning the meeting that is sent to a creditor or member must be accompanied by a statement complying with this section, and
      (b) every notice summoning the meeting that is given by advertisement must either—
      (i) include such a statement, or
      (ii) state where and how creditors or members entitled to attend the meeting may obtain copies of such a statement.
      (2) The statement must—
      (a) explain the effect of the compromise or arrangement, and
      (b) in particular, state—
      (i) any material interests of the directors of the company (whether as directors or as members or as creditors of the company or otherwise), and
      (ii) 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) Where the compromise or arrangement affects the rights of debenture holders of the company, the statement must 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.
      (4) Where a notice given by advertisement states that copies of an explanatory statement can be obtained by creditors or members entitled to attend the meeting, every such creditor or member is entitled, on making application in the manner indicated by the notice, to be provided by the company with a copy of the statement free of charge.
      (5) If a company fails to comply with this section, a contravention of these Regulations is committed by—
      (a) the company, and
      (b) every officer of the company who is in default.
      This is subject to subsection (7) below.
      (6) For this purpose the following are treated as officers of the company—
      (a) a liquidator or administrator of the company, and
      (b) a trustee of a deed for securing the issue of debentures of the company.
      (7) A person does not contravene this section if he shows that the default was due to the refusal of a director or trustee for debenture holders to supply the necessary particulars of his interests.
      (8) A person who commits the contravention referred to in subsection (5) shall be liable to a level 3 fine.

    • 804. Duty of directors and trustees to provide information

      (1) It is the duty of—
      (a) any director of the company, and
      (b) 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 section 803 (statement to be circulated or made available).
      (2) Any person who makes default in complying with this section commits a contravention of these Regulations.
      (3) A person who commits the contravention referred to in subsection (2) shall be liable to a fine of up to level 8.

    • 805. Court sanction for compromise or arrangement

      (1) If:
      (a) 75% in value of the creditors or class of creditors or if members or class of members (as the case may be) representing 75% of the voting rights of the 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 802, agree a compromise or arrangement, and
      (b) where the compromise or arrangement relates to a non-ADGM company (as defined in section 1028 (minor definitions: general)), the Court is satisfied that the requirements of section 810(2) have been or are satisfied with respect to such company,
      the Court may, on an application under this section, sanction the compromise or arrangement.
      (2) 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.
      (3) A compromise or arrangement sanctioned by the Court is binding on—
      (a) all creditors or the class of creditors or on the members or class of members (as the case may be), and
      (b) the company or, in the case of a company in the course of being wound up, the liquidator and contributories of the company.
      (4) The Court's order has no effect until a copy of it has been delivered to the Registrar.
      (5) Section 341 (representation of corporations at meetings) applies to a meeting of creditors under this section as to a meeting of the company (references to a member of the company being read as references to a creditor).

    • 806. Powers of Court to facilitate reconstruction or amalgamation or merger or division

      (1) This section applies where application is made to the Court under section 805 to sanction a compromise or arrangement and it is shown that one or more of the following applies—
      (a) the compromise or arrangement is proposed for the purposes of, or in connection with, a scheme:
      (i) for the reconstruction of any company or companies, and
      (ii) under which 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"),
      (b) the compromise or arrangement is proposed for the purposes of, or in connection with, a scheme involving a merger or amalgamation under which two or more companies are to merge or amalgamate into a single company or body corporate or into a new company as described in section 810(1)(a) or 810(1)(b), or
      (c) the compromise or arrangement is proposed for the purposes of, or in connection with, a scheme under which the undertaking, property and liabilities of a company are to be divided and transferred as mentioned in section 830(1).
      (2) The Court may, either by the order sanctioning the compromise or arrangement or by a subsequent order, make provision for all or any of the following matters—
      (a) the transfer to the transferee company of the whole or any part of the undertaking and of the property or liabilities of any scheme transferor company, or the merger of the two or more companies or the division of the company and its undertaking, property and liabilities,
      (b) the issue or appropriation by the scheme transferee company or surviving company of any shares, debentures, policies or other like interests in that scheme transferee company or surviving company which under the compromise or arrangement are to be allotted or appropriated by that scheme transferee company or surviving company to or for any person,
      (c) the continuation by or against the scheme transferee company or surviving company of any legal proceedings pending by or against any scheme transferor company on such terms as the Court may order,
      (d) the dissolution, without winding up, of any scheme 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 supplemental or any other matters as the Court may, in its discretion think fit or may consider necessary to secure that the reconstruction, amalgamation, merger or division is fully and effectively carried out.
      (3) If an order under this section provides for the transfer of property or liabilities—
      (a) the property is by virtue of the order transferred to, and vests in, the scheme transferee company, and
      (b) the liabilities are, by virtue of the order, transferred to and become liabilities of that company.
      (4) The property (if the order so directs) vests freed from any charge that is by virtue of the compromise or arrangement to cease to have effect.
      (5) In this section—
      "liabilities" includes duties and obligations,

      "merging company" has the meaning set out in section 810(3),

      "property" includes property, rights and powers of every description,

      "scheme transferee company" means (i) a transferee company; and (ii) any existing company or new company in the case of a scheme involving a division as mentioned in section 830,

      "scheme transferor company" means (i) a transferor company, and (ii) any company whose undertaking, property and liabilities are to be divided and transferred under Chapter 3 of Part 26,

      "surviving company" has the meaning set out in section 810(3),

      "transferee company" has the meaning given to it in subsection (1)(a)(ii), and

      "transferor company" has the meaning given to it in subsection (1)(a)(ii).
      (6) Every company in relation to which an order is made under this section must cause a copy of the order to be delivered to the Registrar within seven days after its making.
      (7) If default is made in complying with subsection (6), a contravention of these Regulations is committed by—
      (a) the company, and
      (b) every officer of the company who is in default.
      (8) A person who commits the contravention referred to in subsection (7) is liable to a level 3 fine.

    • 807. Obligations of company with respect to articles etc

      (1) This section applies—
      (a) to any order under section 805 (Court sanction for compromise or arrangement), and
      (b) to any order under section 806 (powers of Court to facilitate reconstruction or amalgamation or merger or division) that alters the company's constitution.
      (2) If the order amends—
      (a) the company's articles, or
      (b) any resolution or agreement to which Chapter 3 of Part 3 applies (resolution or agreement affecting a company's constitution),
      the copy of the order delivered to the Registrar by the company under section 805(4) or section 806(6) must be accompanied by a copy of the company's articles, or the resolution or agreement in question, as amended.
      (3) Every copy of the company's articles issued by the company after the order is made must be accompanied by a copy of the order, unless the effect of the order has been incorporated into the articles by amendment.
      (4) In this section:
      (a) references to the effect of the order include the effect of the compromise or arrangement to which the order relates;
      (b) in the case of a company not having articles, references to its articles shall be read as references to the instrument constituting the company or defining its constitution.
      (5) If a company defaults in complying with this section, a contravention of these Regulations is committed by—
      (a) the company, and
      (b) every officer of the company who is in default.
      (6) A person who commits the contravention referred to in subsection (5) is liable to a level 3 fine.