Compromise or arrangement - reconstructions, Business Law and Ethics

Compromise or arrangement - reconstructions:

A scheme of arrangement is very flexible since it may be used to effect any "compromise or arrangement" with members or a class of members with creditors or a class of creditors.  It has been used to vary the rights attached to debentures or preference shares (when there are obstacles to a straightforward reduction of capital or variation of class rights) or to reorganize the capital structure of a company or to acquire shares of a company (instead of a take-over bid to which s.210 will be valid).  But if there is a specific procedure, such as a reduction of capital or a variation of class rights which can be used the court would not permit the use of a scheme of arrangement to avoid some safeguard of minority interests available under that specific procedure.

Posted Date: 1/15/2013 3:18:37 AM | Location : United States







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