Section 12 — COMPANIES (AMENDMENT) ACT 2024

(2)

When a related company makes an application under subsection (1), the related company shall—

(a)

publish a notice of the application in the manner as may be determined by the Registrar; and

(b)

unless the Court directs otherwise, send the notice of the application to each creditor of the related company who may be affected by a restraining order granted under subsection (1).

(3)

The Court may grant a restraining order to a related company if the Court is satisfied that—

(a)

no order has been made, and no resolution has been passed, for the winding up of the related company;

(b)

the restraining order granted to the subject company under subsection 368(1) or (2) is in force;

(c)

the related company plays a necessary and integral role in the compromise or arrangement of the subject company;

(d)

the compromise or arrangement referred to in paragraph (c) will be frustrated if one or more of the actions that may be restrained by the restraining order is taken against the related company; and

(e)

the creditors of the related company will not be unfairly prejudiced if a restraining order is granted.

(4)

A restraining order granted under subsection (1) may include one or more of the following orders:

(a)

no order be made, and no resolution may be passed, for the winding up of the related company;

(b)

no receiver or receiver and manager may be appointed over any undertaking or property of the related company;

Companies (Amendment)

(c)

no proceedings may be commenced or continued against the related company other than the proceedings under this section, section 366, 368c, 368d, 369a or 370, except with the leave of the Court and subject to any terms as the Court may impose;

(d)

no execution, distress or other legal process may be commenced, continued or levied against any property of the related company, except with the leave of the Court and subject to any terms as the Court may impose;

(e)

no steps may be taken to enforce any security over any property of the related company, or to repossess any goods held by the related company under any chattels leasing agreement, hire purchase agreement or retention of title agreement, except with the leave of the Court and subject to any terms as the Court may impose;

(f)

no right of re-entry or forfeiture under any lease in respect of any premises occupied by the related company may be enforced except with the leave of the Court and subject to such any terms as the

Court may impose.

(5)

The Court may, on application by the related company, grant an order to extend the period of the order granted under subsection (1) for a period of not more than the period of restraining order granted to the subject company under section 368.

(6)

The related company, any creditor of the related company or any receiver and manager of the whole or substantially the whole, of the undertaking or property of the related company, may apply to the Court for an order discharging or varying a restraining order granted under subsection (1).

(7)

The related company shall, within seven days after the date of an order granted under subsection (1), (5) or (6), lodge an office copy of the order with the Registrar.

18

Super priority for rescue financing for compromise or arrangement 368b. (1) Where a company has made an application under subsection 366(1) or subsection 368(1), the Court may, on an application by the company under this section, grant one or more of the following orders:

(a)

an order that if the company is wound up, notwithstanding subsection 527(1), the debt arising from any rescue financing obtained by the company shall be paid immediately after the costs and expenses of the winding up of the company referred to in paragraph 527(1)(a) are paid;

(b)

an order to secure a debt arising from any rescue financing which otherwise would not have been able to be obtained by the company unless the debt is secured by—

(i)

a security interest on property of the company that is not subject to any security interest;

or

(ii)

a subordinate security interest on property of the company that is subject to an existing security interest;

(c)

an order to secure a debt arising from any rescue financing to be obtained by the company by a security interest of the same priority as or a higher priority than an existing security interest on property of the company, if—

(i)

the company would not have been able to obtain the rescue financing from any person unless the debt arising from the rescue financing is secured in the manner referred to in this paragraph; and

(ii)

the interests of existing security interest holder are adequately protected.

(2)

A company that makes an application under subsection (1) shall, unless the Court orders otherwise, send a notice of the application to each creditor of the company.

Companies (Amendment)

(3)

The reversal or modification on appeal of an order under paragraph (1)(b) or (c) does not affect the validity of any debt so incurred, or any security interest that was granted pursuant to the order, or the priority of that security interest, if the debt arising from rescue financing intended to be secured by that security interest was provided in good faith, whether or not with knowledge of the appeal, unless the order was stayed pending the appeal before the rescue financing was provided.

(4)

For the purposes of subparagraph (1)(c)(ii), the interests of an existing security interest holder is adequately protected if—

(a)

the Court orders the company to make one or more cash payments to the holder, the total amount of which is sufficient to compensate the holder for any decrease in the value of the holder’s existing security interest that may result from the making of the order under paragraph (1)(c);

(b)

the Court orders the company to provide to the holder additional or replacement security of a value sufficient to compensate the holder for any decrease in the value of the holder’s existing security interest that may result from the making of the order under paragraph (1)(c); or

(c)

the Court grants any relief, other than compensation, that will result in the realisation by the holder of the indubitable equivalent of the holder’s existing security interest.

(5)

Where a company that has two or more super priority debts is wound up, the super priority debts—

(a)

rank equally in priority among all of the super priority debts; and

(b)

are to be paid in full or, if the company has insufficient property to meet the debt, shall rank pari passu and shall be paid in equal proportion among all of the super priority debts.

20

(6)

Sections 426 and 528 shall not affect any priority conferred, any security interest or relief granted, or any payment made, pursuant to and in accordance with an order granted under subsection (1).

(7)

The company shall, within seven days after the date of an order granted under subsection (1), lodge an office copy of the order with the Registrar.

(8)

In this section—

(a)

“rescue financing” means any financing that satisfies either one or more of the following conditions:

(i)

the financing is necessary for the survival of a company that obtains the financing or the whole or any part of its undertaking as a going concern;

(ii)

the financing is necessary for the Court’s approval under subsection 366(4) or subsection 369c(5) of a compromise or arrangement referred to in subsection 366(1)

or subsection 369c(1), as the case may be, involving a company that obtains the financing;

(iii)

the financing is necessary to achieve a more advantageous realisation of the assets of a company that obtains the financing, than on a winding up of that company;

(b)

“security interest” means any mortgage, charge, pledge, lien or other type of security interest recognized by law;

(c)

“super priority debt” means a debt, arising from any rescue financing obtained or to be obtained by a company, that is to have priority, pursuant to an order under subsection (1), over all the preferential debts specified in paragraphs 527(1)(b) to (f)

and all other unsecured debts, if the company is wound up.

Companies (Amendment)

21

Restraint of disposition of property, etc., during the period of restraining order 368c. (1) The Court may, on an application made by any creditor of a subject company or a related company at any time while a restraining order granted under section 368 or 368a is in force, grant one or more of the following orders:

(a)

an order restraining the disposal of property of the subject company or a related company other than in its ordinary course of business;

(b)

an order restraining the transfer of any shares of the subject company or the related company;

(c)

an order restraining the alteration of the rights of any member of the subject company or the related company.

(2)

The period of an order granted under this section shall not exceed the expiry date of a restraining order granted under section 368 or 368a.

Power of Court to cram down 368d. (1) This section applies where—

(a)

a compromise or arrangement between a company and its creditors or any class of those creditors has been voted on at a relevant meeting;

(b)

the creditors meant to be bound by the compromise or arrangement are placed in two or more classes of creditors for the purpose of voting on the compromise or arrangement at the relevant meeting;

(c)

the conditions in subsection 366(3), in so far as they are applicable, are satisfied at the relevant meeting in respect of at least one class of creditors; and

22

(d)

the conditions in subsection 366(3), in so far as they are applicable, are not satisfied at the relevant meeting in respect of at least one class of creditors, each called in this section a dissenting class.

(2)

Notwithstanding subsections 366(1) and (3), the

Court may, subject to this section and on the application of the company, or a creditor of the company who has obtained the leave of the Court to make an application under this subsection, approve the compromise or arrangement, and order that the company and all classes of creditors concerned shall be bound by the compromise or arrangement.

(3)

The Court may make an order under subsection (2) if—

(a)

a majority of seventy-five per centum of the total value of creditors or class of creditors or members or class of members who were meant to be bound by the compromise or arrangement, and who were present and voting either in person or by proxy at the relevant meeting, have agreed to the compromise or arrangement; and

(b)

the Court is satisfied that the compromise or arrangement does not discriminate unfairly between two or more classes of creditors and is fair and equitable to each dissenting class.

(4)

For the purposes of paragraph (3)(b), a compromise or arrangement is fair and equitable to a dissenting class if the following conditions are fulfilled:

(a)

no creditor in the dissenting class receives, under the terms of the compromise or arrangement, an amount that is lower than the amount to be received by the creditor as estimated by the Court in the most likely scenario if the compromise or arrangement does not become binding on the company and all classes of creditors concerned meant to be bound by the compromise or arrangement; and

Companies (Amendment)

(b)

either of the following applies:

(i)

where the creditors in the dissenting class are secured creditors, the terms of the compromise or arrangement—

(A)

shall provide for each creditor in the dissenting class to receive deferred cash payments totalling the amount of the creditor’s claim that is secured by the security held by the creditor, and preserve that security and the extent of that claim, whether or not the property subject to that security is to be retained by the company or transferred to another entity under the terms of the compromise or arrangement;

(B)

shall provide that where the security held by any creditor in the dissenting class to secure the creditor’s claim is to be realised by the company free of encumbrances, the creditor has a charge over the proceeds of the realisation to satisfy the creditor’s claim that is secured by that security; or

(C)

shall provide that each creditor in the dissenting class is entitled to realise the indubitable value equivalent to the security held by the creditor in order to satisfy the creditor’s claim that is secured by that security; or

(ii)

where the creditors in the dissenting class are unsecured creditors, the terms of the compromise or arrangement—

(A)

shall provide for each creditor in that class to receive property of a value equal to the amount of the creditor’s claim; or

24

(B)

shall not provide for any creditor with a claim that is subordinate to the claim of a creditor in the dissenting class, or any member, to receive or retain any property on account of the subordinate claim or the member’s interest.

(5)

The Court may require the insolvency practitioner appointed under subsection 367(3) to assist the Court in estimating the amount that a creditor is expected to receive in the most likely scenario if the compromise or arrangement does not become binding on the company and all class of creditors meant to be bound by the compromise or arrangement.

(6)

In this section, “relevant meeting” means—

(a)

where the compromise or arrangement in question is subject to a revote under subsection 369a(1), the meeting held for that purposes; or

(b)

the meeting ordered by the Court under subsection 366(1) or, if that meeting is adjourned under subsection 366(2), the adjourned meeting.”.

New sections 369a, 369b, 369c and 369d