Secretarial practice

Bibliographic data

Monograph

Identifikator:: 1828236004

URN:: urn:nbn:de:zbw-retromon-249926

Document type:: Monograph

Title:: Secretarial practice

Edition:: fourth edition

Place of publication:: Cambridge

Publisher:: W. Heffer & Sons Ltd

Year of publication:: 1930

Scope:: viii, 987 Seiten

Digitisation:: 2022

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XIX. Reconstruction and schemes of arrangements

Collection:: Economics Books

216 SECRETARIAL PRACTICE Creditors. nominated by each party and an umpire to be agreed upon. The Arbitration Act of 1889 also applies where it is not incon- sistent with the Companies Clauses Consolidation Act, 1845. But where the company’s articles make other provisions for arbitration, they may be followed, to the exclusion of the Act [De Rosaz v. Anglo-Italian Bank (1869), L.R. 4 Q.B. 462]. The value must be determined by the arbitrator, who will often rely on the evidence of experts. He should not assume that the shares which form the purchase consideration are worth par, nor should he assume that the market price of the shares represents their true value. The value of the selling company’s business as a going concern, taking all the cir- cumstances into consideration, will be an important element in enabling him to come to a conclusion. In framing the scheme care should be taken to provide a fund sufficient to purchase the interests of dissentients. This may be done by the exclusion from the sale of a sufficient portion of the assets of the old company, but it is more usual for the whole of the assets to be sold and the new company to undertake to provide the necessary money. This they may do by borrowing, or, if their shares are partly paid, out of the funds obtained by making a call thereon. If the interests of the dissentients are not adequately protected by the scheme, by the provision of adequate funds, the liquidator may be restrained from parting with the assets. The rights of dissentients are statutory rights, and members cannot be deprived of them by provisions in the articles; any such provisions are wholly invalid [Baring-Gould v. Sharpington Syndicate (1899), 2 Ch. go]. A scheme under s. 234 is, as has been stated, binding on the shareholders, but the rights of creditors are protected; for the section provides as follows: ‘If an order is made within a year for winding up the company by or subject to the super- vision of the Court, the special resolution shall not be valid unless sanctioned by the Court.” There is, accordingly, for the space of a year, a danger of the scheme becoming inopera- tive; but at the expiration of a year, if no winding-up order or supervision order is made, the scheme is binding upon creditors as well as shareholders. There is a method of insuring the scheme against becoming inoperative which has sometimes been adopted; this is to procure a friendly creditor to petition for a supervision order, and afterwards to obtain the sanction of the Court to the scheme. However, it is usual for the matter of the creditors to be dealt with when the scheme is first mooted. Debenture holders are asked to agree to accept debentures in the new companv in lieu of

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