Nature of a deeds of arrangement-bankruptcy and liquidation, Financial Accounting

Nature of a Deeds of Arrangement

To avoid the expense and delay involved in a bankruptcy, a debtor in trouble may make a private arrangement with the creditors to accept payment of a smaller sum of money in full discharge of their debts before a bankruptcy petition has been presented. In contrast to compositions and schemes of arrangement and the arrangement will be outside the bankruptcy law. Such arrangements will bind only those creditors who assent to the arrangement and the debtor will not be released from the claims of the others,

Whereas under a composition or scheme or arrangement the debtor is released from all claims except those from which he would not be released by his discharge from bankruptcy.

These arrangements will usually come within the ambit of the Deeds of Arrangement Act. The D.A.A. defines a D of A as any instrument, whether under seal or not, made for the benefit of creditors generally, or made by an insolvent debtor for the benefit of three or more creditors. It may be:—

  1. An assignment of property
  2. A deed of composition
  3. A deed of inspectorship for carrying on or winding up a business
  4. A letter of license authorising a debtor or any other person to carry on or dispose of a business with a view to the payment of debts
  5. Any agreement for the carrying on or winding up a debtor's business with a view to the payment of his debt (DAA s.3).
Posted Date: 12/13/2012 1:32:03 AM | Location : United States

Related Discussions:- Nature of a deeds of arrangement-bankruptcy and liquidation, Assignment Help, Ask Question on Nature of a deeds of arrangement-bankruptcy and liquidation, Get Answer, Expert's Help, Nature of a deeds of arrangement-bankruptcy and liquidation Discussions

Write discussion on Nature of a deeds of arrangement-bankruptcy and liquidation
Your posts are moderated
Related Questions
Q. Report on the management of foreign trade risks? Your company is probable to face three types of risk in connection with its foreign trade. These are as: (1) Foreign exch

Q. Net present value evaluation of proposed investment? WORKINGS Fixed costs = 4·50 × 100000 = $450000 per year Annual writing down allowance = 3000000/10 = $300000

BREACH OF TRUST Remedies available to beneficiary: Injunction, Personal action, Criminal liability. Defence of trusts: He may be relieved from liability if, in the opini

Cash flow Estimation and Capital Budgeting XYZ Electronics, Inc. is a manufacturer of eBook Readers. Its current model is selling excellently. However, in order to cope with t

Consequences of adjudication The consequences of the making of the adjudication order are: 1. The order must be advertised in the gazette and a local paper; 2. The ownershi

Series Arithmetic Mean Standard Deviation   Small-company stocks 15.9  % 32.8  %   Large-company

Ask questiJohn’s away at the moment, and his email provider has a size limit on the data that can be sent via email. What is a potential solution for John, and name a provider that

Identify the Depreciation Methods On January 3, 2005, XYZ Distribution Co. paid $224,000 for a computer system. In addition to the basic purchase price, the company paid a set

Choose a share from a market such as LSE, NYSE, NASDAQ, etc. [Data sources could be Datastream, Google Finance or others]. Prepare a report which involves the following aspects: -

These are the indirect costs that are related with manufacturing. Absorbed costs involve expenses like insurance, or property taxes for the building in which the production process