11 - BL - Insolvency corp. Restructuring Flashcards
Restructuring Plan
Who can initiate a Restructuring Plan?
- Company,
- creditor,
- member,
- liquidator or administrator
Restructuring Plan
What is required for the approval of a Restructuring Plan?
- Sanctioned by the court
- 75% in value of each affected class of creditors
AND
- 75% of shareholders
(court may still sanction even if one or more classes haven’t approved it)
Restructuring Plan
Who is bound by a Restructuring Plan?
Binds all creditors
Restructuring Plan
What are the advantages of a Restructuring Plan?
Binds all creditors including dissenting creditors and potentially classes of creditors who do not approve the plan
The court can sanction a plan even if one or more classes do not approve
Restructuring Plan
What are the limitations of a Restructuring Plan?
Court process can be costly and time consuming
Receivership
What is Receivership?
Receivership is an individual enforcement procedure for fixed charge holders which benefits only the appointing creditor.
Receivership
Who can appoint a Receiver?
Fixed charge holders.
It will be a condition of the debenture that a receiver can be appointed.