Section 239 - Arrangement or compromise with Court approval

(1) Where an arrangement or compromise is proposed between a company and the creditors, or any class of the creditors, or members or any class of members of the company, the Court, on application of

(a) the company or a member or creditor of the company,

(b) the liquidator in the case of a company being wound up,

(c) the administrator where an administration order in relation to the company is still in force, or

(d) any other person interested in the matter

may order that meetings of the various classes of members and creditors be summoned in the manner that the Court directs.

(2) Where a majority in number, representing seventy-five percent in value, of each class of members concerned and a majority in number representing seventy-five percent in value of each class of creditors concerned approve the arrangement or compromise, the approval shall be referred to the Registrar by the persons concerned.

(3) The Registrar shall recommend to the Court, the appointment of a reporter who shall be a qualified insolvency practitioner, to investigate the fairness of the arrangement or compromise.

(4) The remuneration of the reporter shall be fixed by the Registrar and the proper expenses of the investigation shall be borne by the company or any other party to the application that the Court orders.

(5) Where the Court, after considering the report, makes an order confirming the arrangement or compromise, with or without modifications, the arrangement or compromise as confirmed is binding on the company and on all members and creditors of the company and its validity shall not subsequently be impeachable in any proceedings.

(6) On the hearing by the Court of the application to confirm the arrangement or compromise, a member or creditor of the company claiming to be affected by the arrangement or compromise is entitled to be represented and to object.

(7) The Court may prescribe the terms that the Court considers fit as a condition of its confirmation including a condition that any member shall be given rights to require the company to purchase the share of the company at a price fixed by the Court or to be determined in a manner provided in the order.

(8) Where the Court is satisfied that the arrangement or compromise involves the transfer of the whole or part of the undertaking or assets of a company to another company, the Court may

(a) exercise its powers under section 240 or 255; or

(b) order the transfer in accordance with this Part.

(9) An arrangement or compromise may be carried out in accordance with this section although it could have been accomplished under section 238 or any other provision of this Act.

(10) Despite subsection (9), sections 78 to 82 shall also be complied with if the arrangement or compromise is one which, by virtue of section 78, requires the confirmation of the Court in accordance with those sections.

(11) An order made under subsection (5) of this section shall not have effect until a certified true copy of the order has been delivered to the Registrar who shall register the order and publish it in the Companies Bulletin.

(12) A copy of the order shall be annexed to every copy of the constitution of the company issued by the company after the order has been made.

(13) If a company defaults in complying with subsection (12), the company and every officer of the company that is in default is liable to pay to the Registrar, an administrative penalty of twenty-five penalty units in respect of each copy issued contrary to subsection (12).