211H. Power of Court to cram down

Question 1

211H. Power of Court to cram down

Answer 1

General overview
[211H.01] Section 211H(1) and (2) empower the court to approve a scheme of compromise or arrangement despite the fact that the requisite approval from each class of creditors was not obtained, viz the majority in number of each class of creditors, representing three-fourths in value of the debt in each class of creditors voting to approve the scheme. This new “cram down” provision prevents a few creditors who may belong to a class of creditors from derailing the entire scheme. The court’s power to approve the scheme is to be exercised with safeguards for the protection of the dissenting creditors.