the Court may make an order under subsection (1A) in relation to the
proposed compromise or arrangement.
(1C) Where an order is made under subsection (1A) in relation to a
proposed compromise or arrangement, the succeeding provisions of this Part
apply to the compromise or arrangement as if:
- (a)
- references in this Part to
a company included references to all of the Part 5.1 bodies to which the
order relates; and
- (b)
- references in this Part to creditors of a company included references to
the creditors of all the Part 5.1 bodies to which the order relates; and
- (c)
- references in this Part to a class of the creditors of a company were
references to the relevant class of creditors of all of the Part 5.1
bodies to which the order relates.
(2) The Court must not make an order pursuant to an application under
subsection (1) or (1A) unless:
- (a)
- 14 days notice of the hearing of the
application, or such lesser period of notice as the Court or ASIC permits, has
been given to ASIC; and
- (b)
- the Court is satisfied that ASIC has had a reasonable opportunity:
- (i)
- to examine the terms of the proposed compromise or arrangement to which
the application relates and a draft explanatory statement relating to the
proposed compromise or arrangement; and
- (ii)
- to make submissions to the Court in relation to the proposed compromise
or arrangement and the draft explanatory statement.
(3) In subsection (2), draft explanatory statement , in relation to a
proposed compromise or arrangement between a body and its creditors or any
class of them or between a body and its members or any class of them, means a
statement:
- (a)
- explaining the effect of the proposed compromise or
arrangement and, in particular, stating any material interests of the
directors of the body, whether as directors, as members or creditors of the
body or otherwise, and the effect on those interests of the proposed
compromise or arrangement in so far as that effect is different from the
effect on the like interests of other persons; and
- (b)
- setting out such information as is prescribed and any other information
that is material to the making of a decision by a creditor or member of the
body whether or not to agree to the proposed compromise or arrangement, being
information that is within the knowledge of the directors of the body and has
not previously been disclosed to the creditors or members of the body.
(3A) In considering whether to make an order under subsection (1) or (1A)
for a meeting to be held outside this jurisdiction, the Court must have regard
to where the creditors or members, or the creditors or members included in the
class concerned, as the case requires, reside.
(4) A compromise or arrangement is binding on the creditors, or on a class of
creditors, or on the members, or on a class of members, as the case may be, of
the body and on the body or, if the body is in the course of being wound up,
on the liquidator and contributories of the body, if, and only if:
- (a)
- at a
meeting convened in accordance with an order of the Court under
subsection (1) or (1A):
- (i)
- in the case of a compromise or arrangement between a body and its
creditors or a class of creditorsthe compromise or arrangement is agreed
to by a majority in number of the creditors, or of the creditors included in
that class of creditors, present and voting, either in person or by proxy,
being a majority whose debts or claims against the company amount in the
aggregate to at least 75% of the total amount of the debts and claims of the
creditors present and voting in person or by proxy, or of the creditors
included in that class present and voting in person or by proxy, as the case
may be; and
(ii) in the case of a compromise or arrangement between a body and its members
or a class of membersa resolution in favour of the compromise or
arrangement is:
(A) passed by a majority in number of the members, or members in that class,
present and voting (either in person or by proxy); and
(B) if the body has a share capitalpassed by 75% of the
votes cast on the resolution; and
- (b)
- it is approved by
order of the Court.
(5) Where the Court orders 2 or more meetings of creditors or of a class of
creditors, or 2 or more meetings of members or of a class of members, to be
held in relation to the proposed compromise or arrangement:
- (a)
- in the case
of meetings of creditorsthe meetings is, for the purposes of
subsection (4), taken together to constitute a single meeting and the
votes in favour of the proposed compromise or arrangement cast at each of the
meetings are to be aggregated, and the votes against the proposed compromise
or arrangement cast at each of the meetings are to be aggregated, accordingly;
or
- (b)
- in the case of meetings of membersthe meetings is, for the purposes
of subsection (4), taken together to constitute a single meeting and the
votes in favour of the proposed compromise or arrangement cast at each of the
meetings is to be aggregated, and the votes against the proposed compromise or
arrangement cast at each of the meetings is to be aggregated, accordingly.
(6) The Court may grant its approval to a compromise or arrangement subject to
such alterations or conditions as it thinks just.
(7) Except with the leave of the Court, a person must not be appointed to
administer, and must not administer, a compromise or arrangement approved
under this Act between a body and its creditors or any class of them or
between a body and its members or any class of them, whether by the terms of
that compromise or arrangement or pursuant to a power given by the terms of a
compromise or arrangement, if the person:
- (a)
- is a mortgagee of any property
of the body; or
- (b)
- is an auditor or an officer of the body; or
- (c)
- is an officer of a body corporate that is a mortgagee of property of the
body; or
- (d)
- is not a registered liquidator; or
- (e)
- is an officer of a body corporate related to the body; or
- (f)
- unless ASIC directs in writing that this paragraph does not apply in
relation to the person in relation to the bodyhas at any time within the
last 12 months been an officer or promoter of the body or of a related body
corporate.
(8) Paragraph (7)(d) does not apply in relation to a body corporate
authorised by or under a law of a State or Territory in this jurisdiction to
administer the compromise or arrangement concerned.
(8A) Subsection (7) does not disqualify a person from administering a
compromise or arrangement under an appointment validly made before
1 January 1991.
(9) Where a person is or persons are appointed by, or under a power given by,
the terms of a compromise or arrangement, to administer the compromise or
arrangement:
- (a)
- section 425, subsections 427(2) and (4) and
sections 428, 432 and 434 apply in relation to that person or those
persons as if:
- (i)
- the appointment of the person or persons to administer the compromise or
arrangement were an appointment of the person or persons as a receiver and
manager, or as receivers and managers, of property of the body; and
- (ii)
- a reference in any of those sections or subsections to a receiver, or to
a receiver of property, of a corporation were a reference to that person or to
those persons; and
- (b)
- section 536 applies in relation to that person or those persons as
if:
- (i)
- the appointment of the person or persons to administer the compromise or
arrangement were an appointment of the person or persons as a liquidator of
the body; and
- (ii)
- a reference in that section to a liquidator were a reference to that
person or to those persons.
(10) An order of the Court made for the purposes of paragraph (4)(b) does
not have any effect until an office copy of the order is lodged with ASIC, and
upon being so lodged, the order takes effect, or is taken to have taken
effect, on and from the date of lodgment or such earlier date as the Court
determines and specifies in the order.
(11) Subject to subsection (12), a copy of every order of the Court made
for the purposes of paragraph (4)(b) must be annexed to every copy of the
constitution of the body issued after the order has been made.
(12) The Court may, by order, exempt a body from compliance with
subsection (11) or determine the period during which the body must comply
with that subsection.
(13) Where a compromise or arrangement referred to in subsection (1) or
(1A) (whether or not for the purposes of or in connection with a scheme for
the reconstruction of a body or bodies or the amalgamation of any 2 or more
bodies) has been proposed, the directors of the body must:
- (a)
- if a meeting
of the members of the body by resolution so directsinstruct such
accountants or solicitors or both as are named in the resolution to report on
the proposals and send their report or reports to the directors as soon as
practicable; and
- (b)
- if a report or reports is or are obtained pursuant to
paragraph (a)make the report or reports available at the registered
office of the body for inspection by the shareholders and creditors of the
body at least 7 days before the day of the meeting ordered by the Court to be
convened as provided in subsection (1) or (1A), as the case may be.
(14) If default is made in complying with subsection (11), the body
contravenes this subsection.
(15) If default is made in complying with subsection (13), each director
of the body contravenes this subsection.
(16) Where no order has been made or resolution passed for the winding up of a
Part 5.1 body and a compromise or arrangement has been proposed between
the body and its creditors or any class of them, the Court may, in addition to
exercising any of its other powers, on the application in a summary way of the
body or of any member or creditor of the body, restrain further proceedings in
any action or other civil proceeding against the body except by leave of the
Court and subject to such terms as the Court imposes.
(17) The Court must not approve a compromise or arrangement under this section
unless:
- (a)
- it is satisfied that the compromise or arrangement has not been
proposed for the purpose of enabling any person to avoid the operation of any
of the provisions of Chapter 6; or
- (b)
- there is produced to the Court a statement in writing by ASIC stating that
ASIC has no objection to the compromise or arrangement;
but the Court need not approve a compromise or arrangement merely because a
statement by ASIC stating that ASIC has no objection to the compromise or
arrangement has been produced to the Court as mentioned in paragraph (b).