BL - Insolvency corp restructuring

Question 1

Restructuring Plan
Who can initiate a Restructuring Plan?

Answer 1

• Company,
• creditor,
• member,
• liquidator or administrator

Question 2

Restructuring Plan
What is required for the approval of a Restructuring Plan?

Answer 2

• 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)

Question 3

Restructuring Plan
Who is bound by a Restructuring Plan?

Answer 3

Binds all creditors

Question 4

Restructuring Plan
What are the advantages of a Restructuring Plan?

Answer 4

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

Question 5

Restructuring Plan
What are the limitations of a Restructuring Plan?

Answer 5

Court process can be costly and time consuming

Question 6

Receivership
What is Receivership?

Answer 6

Receivership is an individual enforcement procedure for fixed charge holders which benefits only the appointing creditor.

Question 7

Receivership
Who can appoint a Receiver?

Answer 7

Fixed charge holders.

It will be a condition of the debenture that a receiver can be appointed.