Disadvantage of a scheme of arrangement, Business Law and Ethics

Disadvantage of a scheme of arrangement:

The disadvantage of a scheme of arrangement is that it requires the preparation of elaborate documents and the observance of a strict procedure, including an initial and final application to the court and the holding of meetings.  All this is expensive.  Hence a scheme of arrangement is only suitable for large companies where substantial values or assets are affected.  Otherwise it is uneconomical.

 If a company which is or is about to be in voluntary liquidation proposes to make a composition with its creditors it has a choice between the following alternatives:

(a) a scheme of arrangement under s.207;

(b) an arrangement sanctioned by three quarters (in number and in value) of the creditors under CA: s.300.  This liquidation procedure is binding on a minority unless the court on the application of a creditor or contributory (member) orders otherwise;

(c) a compromise made by the liquidator in exercise of statutory powers under CA, s.241 or s.297(1)(a).  For this purpose he must obtain approval of members, creditors, committee of inspection or the court according to the circumstances of the case.

Posted Date: 1/15/2013 4:14:40 AM | Location : United States







Related Discussions:- Disadvantage of a scheme of arrangement, Assignment Help, Ask Question on Disadvantage of a scheme of arrangement, Get Answer, Expert's Help, Disadvantage of a scheme of arrangement Discussions

Write discussion on Disadvantage of a scheme of arrangement
Your posts are moderated
Related Questions
Spill over Effects of Monetary Policy There are three broad ways in which aggregate demand policies in one country can spillover to affect another country. These are the real i

Most legal conflicts are settled outside of court, frequently using some sort of dispute resolution. There are times when a party cannot take a case to court until they have made a

Jordan is the director a big engineering Company. Tyson is the Chief Engineer of the company. He is working on the company's new project, namely the construction of a new building

Determine the focal point for coordination The focal point for coordination is point C, which is the unique symmetrical Pareto efficient outcome. Compared to this outcome the N

The acts of non-state actor More importantly, the concept of non-state actor needs be discussed by the concept of state responsibility, that is to say how and to what extent a

Common law rule - meetings and resolutions: The common law rule applies irrespective of whether the failure to give notice of the meeting was deliberate or unintentional.  How

Counter - offer and Death - Termination of an Offer Counter - offer However a counter - offer is constituted through the offeree's qualified acceptance that in itself g

Differences between Liquidators and receivers: There are also significant differences: (a)a liquidator has numerous statutory powers. A receiver must rely on the powers given

"Detriment" as consideration  An example of a 'detriment' that will legally suffice like the consideration for a promise is provided with the case of Carlill v. Carbolic Smoke

Question 1: Discuss the legal relationship between a bank and its customer with reference to the responsibilities of the parties towards each other. Question 2: This qu