Companies Act Schemes of Arrangement and Rescue: The Lost Cousin of Restructuring Practice?
Butterworths Journal of International Banking and Financial Law (JIBFL), Forthcoming
12 Pages Posted: 16 Jan 2009 Last revised: 3 Jun 2009
Date Written: January 15, 2009
Abstract
It is an axiom of English corporate insolvency law that rescue of the company is the paramount consideration for insolvency practitioners and directors. This approach is evidenced by the legislative reforms introduced by the Enterprise Act 2002 in the realm of administration and more recently by Mr Alistair Darling MP’s announcement that Company Voluntary Arrangements (CVAs) with moratoriums are to be reformed following a consultation that will start in June 2009. Recent reform activity in the area of company law has also affected restructuring practice. Section 895 of the Companies Act 2006 replaces the scheme of arrangement provisions in s.425 Companies Act 1985. There have been a number of calls for reform of the scheme of arrangement provisions so as to make them more useful for facilitating company rescue. In this article these reforms, and some supposed missed opportunities, are critically examined.
Keywords: schemes of arrangement, chapter 11, restructuring, company, insolvency, bankruptcy, debtor, creditor
JEL Classification: K00
Suggested Citation: Suggested Citation