SCHEDULES

F1SCHEDULE A1 Moratorium where directors propose voluntary arrangement

Part V Consideration and implementation of voluntary arrangement

Challenge of decisions

38

(1)

Subject to the following provisions of this paragraph, any of the persons mentioned in sub-paragraph (2) may apply to the court on one or both of the following grounds—

(a)

that a voluntary arrangement F2approved at one or both of the meetings summoned under paragraph 29 and which has taken effect F2which has taken effect under paragraph 37 unfairly prejudices the interests of a creditor, member or contributory of the company,

(b)

that there has been some material irregularity at or in relation to F3either of those meetings F3the meeting of the company summoned under paragraph 29, or in relation to the relevant qualifying decision procedure .

F4(1A)

In this paragraph—

(a)

the “relevant qualifying decision procedure” means the qualifying decision procedure in which the creditors decided whether to approve the voluntary arrangement;

(b)

references to a decision made in the relevant qualifying decision procedure include any other decision made in that qualifying decision procedure.

(2)

The persons who may apply under this paragraph are—

(a)

a person entitled, in accordance with the rules, to vote at F5either of the meetings F5the meeting of the company or in the relevant qualifying decision procedure ,

(b)

a person who would have been entitled, in accordance with the rules, to vote F6at the creditors’ meeting F6in the relevant qualifying decision procedure if he had had notice of it, and

(c)

the nominee.

(3)

An application under this paragraph shall not be made—

(a)

after the end of the period of 28 days beginning with the first day on which each of the reports required by paragraph 30(3) F7and (4) has been made to the court, or

(b)

in the case of a person who was not given notice of the F8creditors’ meeting F8relevant qualifying decision procedure , after the end of the period of 28 days beginning with the day on which he became aware that F9the meeting F9the relevant qualifying decision procedure had taken place,

but (subject to that) an application made by a person within sub-paragraph (2)(b) on the ground that the arrangement prejudices his interests may be made after the arrangement has ceased to have effect, unless it came to an end prematurely.

(4)

Where on an application under this paragraph the court is satisfied as to either of the grounds mentioned in sub-paragraph (1), it may do any of the following—

(a)

revoke or suspend—

(i)

any decision approving the voluntary arrangement which has effect under paragraph 36, or

(ii)

in a case falling within sub-paragraph (1)(b), any decision taken by the meeting F10in question F10of the company, or in the relevant qualifying decision procedure, which has effect under that paragraph,

(b)

give a direction to any person—

(i)

for the summoning of F11further meetings F11a further company meeting to consider any revised proposal for a voluntary arrangement which the directors may make, or

(ii)

in a case falling within sub-paragraph (1)(b) F12and relating to the company meeting , for the summoning of a further company F13or (as the case may be) creditors’ meeting to reconsider the original proposal.

F14(c)

direct any person—

(i)

to seek a decision from the company's creditors (using a qualifying decision procedure) as to whether they approve any revised proposal for a voluntary arrangement which the directors may make, or

(ii)

in a case falling within sub-paragraph (1)(b) and relating to the relevant qualifying decision procedure, to seek a decision from the company's creditors (using a qualifying decision procedure) as to whether they approve the original proposal.

(5)

Where at any time after giving a direction under sub-paragraph (4)(b)(i) F15or (c)(i) the court is satisfied that the directors do not intend to submit a revised proposal, the court shall revoke the direction and revoke or suspend any decision approving the voluntary arrangement which has effect under paragraph 36.

(6)

Where the court gives a direction under sub-paragraph (4)(b) F16or (c) , it may also give a direction continuing or, as the case may require, renewing, for such period as may be specified in the direction, the effect of the moratorium.

(7)

Sub-paragraph (8) applies in a case where the court, on an application under this paragraph—

(a)

gives a direction under sub-paragraph (4)(b) F17or (c) , or

(b)

revokes or suspends a decision under sub-paragraph (4)(a) or (5).

(8)

In such a case, the court may give such supplemental directions as it thinks fit and, in particular, directions with respect to—

(a)

things done under the voluntary arrangement since it took effect, and

(b)

such things done since that time as could not have been done if a moratorium had been in force in relation to the company when they were done.

(9)

Except in pursuance of the preceding provisions of this paragraph,

F18(a)

a decision taken at a F19company meeting summoned under paragraph 29 is not invalidated by any irregularity at or in relation to the meeting.F20, and

(b)

a decision of the company's creditors made in the relevant qualifying decision procedure is not invalidated by any irregularity in relation to the relevant qualifying decision procedure.