Part 28Takeovers etc

Chapter 3“Squeeze-out” and “Sell-out”

“Squeeze-out”

982Further provision about consideration held on trust under section 981(9)

(1)

This section applies where an offeror pays or transfers consideration to the company under section 981(6).

(2)

The company must pay into a separate bank account that complies with subsection (3)—

(a)

any money it receives under paragraph (b) of section 981(6), and

(b)

any dividend or other sum accruing from any other consideration it receives under that paragraph.

(3)

A bank account complies with this subsection if the balance on the account—

(a)

bears interest at an appropriate rate, and

(b)

can be withdrawn by such notice (if any) as is appropriate.

(4)

If—

(a)

the person entitled to the consideration held on trust by virtue of section 981(9) cannot be found, and

(b)

subsection (5) applies,

the consideration (together with any interest, dividend or other benefit that has accrued from it) must be paid into court.

(5)

This subsection applies where—

(a)

reasonable enquiries have been made at reasonable intervals to find the person, and

(b)

twelve years have elapsed since the consideration was received, or the company is wound up.

(6)

In relation to a company registered in Scotland, subsections (7) and (8) apply instead of subsection (4).

(7)

If the person entitled to the consideration held on trust by virtue of section 981(9) cannot be found and subsection (5) applies—

(a)

the trust terminates,

(b)

the company or (if the company is wound up) the liquidator must sell any consideration other than cash and any benefit other than cash that has accrued from the consideration, and

(c)

a sum representing—

(i)

the consideration so far as it is cash,

(ii)

the proceeds of any sale under paragraph (b), and

(iii)

any interest, dividend or other benefit that has accrued from the consideration,

must be deposited in the name of the Accountant of Court in a separate bank account complying with subsection (3) and the receipt for the deposit must be transmitted to the Accountant of Court.

(8)

Section 58 of the Bankruptcy (Scotland) Act 1985 (c. 66) (so far as consistent with this Act) applies (with any necessary modifications) to sums deposited under subsection (7) as it applies to sums deposited under section 57(1)(a) of that Act.

(9)

The expenses of any such enquiries as are mentioned in subsection (5) may be paid out of the money or other property held on trust for the person to whom the enquiry relates.