78H. Creditor protection

Question 1

78H. Creditor protection

Answer 1

General overview
[78H.01] Upon a company’s application under s 78G(1) for the court to approve the proposed capital reduction, s 78H would apply if: (a) the reduction relates to unpaid share capital; or (b) the payment to a shareholder of any paid-up share capital.

Question 2

Qualifying creditors

Answer 2

[78H.02] Subsection (4) provides that the court has to ascertain a list of qualifying creditors and the nature and amounts of debts and claims. A “qualifying creditor” is defined as “a creditor who is entitled to prove his debt or claim against the company in a winding up of the company”: s 78H(6). See further, s 327 on proof of debts.

Question 3

Notice to creditors

Answer 3

[78H.03] Subsection (4)(b) states that the court shall order that the list of qualifying creditors to be published so as to allow the creditors stated therein an opportunity to object or admit their debt or claim.