21: Company law restructuring and insolvency Flashcards
what are the three forms of corporate restructuring?
reconstructions
amalgamations
partitions
what is a reconstruction?
a reconstruction is the separation of all or part of a company to a new person, but there is no real change in person.
what is an amalgamation in corporate restructuring?
bringing together two or more undertakings of separate companies
a takeover is a type of which corporate restructuring?
amalgamation
what are the terms for the separate companies that are brought together within a single company?
separate companies:
single company:
separate companies: participating companies
single company: receiving company
an amalgamation requires the continuity of _ interest
shareholder
during a voluntary arrangement, once the nominee arranges a meeting between the shareholders and creditors to arrange liable debts, once they have agreed to the arrangement, it is a binding agreement between…?
the shareholders and creditors
can the voluntary arrangement be challenged by either the shareholders or creditors?
yes
what is the primary objective of administrator?
to rescue a company as a going concern
what is the secondary objective of administrator?
to advantageously realise a company’s assets for the company’s creditors
what is the tertiary objective of administrator?
to realise the company’s property so as to make a distribution to one or more creditors
what qualification/license must the administrator have?
a licensed insolvency practitioner
once an administrator is set, can a secured creditor secure their charges and can an unsecured creditor enforce their debts?
not without court permission
what does it mean for a business to be insolvent?
they do not have sufficient assets to meet their liabilities
what are the three types of liquidation?
compulsory liquidation
members voluntary liquidation
creditors voluntary liquidation
compulsory liquidation is whereby a _ orders a company to be wound up
court
when a liquidator is appointed, who will become the beneficial owner of the company’s assets?
the liquidator
what is the order in which realised assets are applied?
- secured creditors with fixed charge (receiver appointed)
- costs to realise assets / expenses
- preferential creditors
- secured creditors
- unsecured creditors
- shareholders according to Articles
are contributions to a personal pension fund part of preferential creditors?
no, but occupational pension fund is
