Francis Beaufort Palmer.

Company precedents for use in relation to companies subject to the Companies acts, 1862 to 1890 ... (Volume 2) online

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not later than noon, on Tuesday, the 30th day of June, 1896.

C. J. S., Voluntary Liqr.

Dated this 29th day of May, 1896.

Where the debentures are to bearer, a deposit is sometimes required as follows : —
' ' Debentiu-e holders attending the said meeting of debenture holders must produce
their debentures, and shareholders holding share warrants to bearer must produce
their share warrants at the meeting of contributories." {West Indian, %e., 18 July,
1892). Or " The prior lien bondholders and debenture holders desiring to attend or
vote by proxy at the meetings must on or before Saturday, the 20th day of October,
1894, deposit their bonds or debentures respectively, as the case may be, with the
company's bankers, the London Joint Stock Bank, Limited, Princes Street, Man-
sion House, E.G., where lists and proxy forms cau be obtained. The bankers'
certificate of deposit will entitle the holder to attend and vote in respect of the
prior lien bonds and debentures so deposited at the meetings of prior lien bond-
holders and debenture holders respectively, and any adjournment thereof, and any
poll to bo taken in consequence thereof, and after the transaction of the business of
the meeting the prior lien bonds and debentures respectively will be returned upon
the surrender of the certificate." Great Southern of Spain Rail. Co., 4th October,



Form 822.


{Title, &;c., see Form 816.)

Mortgage Insurance Corporation, Limtd.

Notice is liLy given that by an order dated tlie IStli Nov. 1895, made
in the above matter by Mr. Eegr Hood, F. and N., the liqrs of the
above-named corporation, were ordered to convene five several meetings
of the classes of creditors and contributories of the corporation speci-
fied in the schedule hereto, for the purpose of considering and, if
thought fit, approving, -with or without modification, a scheme of
arrangement proposed to be made between the sd corporation and the
sd several classes of creditors thof, a copy of which scheme can be seen

at the office of the liqr's solors, Messrs. A., B. and C, of , in the

City of London, prior to the day of the meetings, and that such
meetings resply will be held at, &c., on Friday, the 6th day of Dec.
1895, at the several times specified in the sd schedule, at which times
and place all the sd classes of creditors and contributories are requested
to attend. The sd creditors and contributories may attend such
meetings resply and vote either in person or by proxy, but no contri-
butory shall give a proxy except to another contributory, and no
creditor shall give a proxy except to another creditor. In the case of
joint creditors or joint contributories, any one of such joint creditors
or joint contributories may vote or give a proxy. Policy holders
attending the meetings must, if required by the liqr or the chairman
of the meeting, produce their policies before voting. The sd order
directs that the sd N., and failing him the sd F., be chairman of such
meetings, and that such chairman is to report the residt thof to the Ct.

Dated, &c.

H. H., Eegr Cos Winding-up.
X. X., Solors to the sd F. and N.


Contributories and Classes of Creditors.

Time Appointed for
Meetinar on 6tli Dec. 1895.

1. Holders of policies of the corpoi-ation, other than mortgage

policies and capital redemption fund policies

2. Secured creditors of the corporation, other than the holders

of capital redemption fund policies

3. Holders of mortgage policies of the corporation

4. Unsecured creditors of the corporation, other than policy

holders and creditors in respect of salaries, wages, and
oftice rent and expenses

5. Contributories

at 11.0 a.m.

at 12.30 p.m.
at 1.30 p.m.

at 3.0 p.m.
at 4.0 p.m.

Mortgage Insuraticc Corporation. Ilood, Eegr.

See Forms 822 and 823, in Gth cd., for notices in case of insurance and guarantee


{Title as in Form 81G.) Form 823.

English, Scottish, aud Australian Chartered Bank. 7 IT

Notice is hby given, that Mr. Registrar has directed separate (colonial

meetings of (1) the creditors of the above-named bank (other than
the Government, the holders of baiik notes, and creditors entitled
in respect of rates, taxes, Avages, and other claims, if any, payable in
full or in priority in the winding-up of the bank), and (2) of the con-
tributories of the sd coy, for the purpose of considering, and, if thought
fit, approving with or without modification, a scheme of arrangement
proposed between the sd coy and its creditors other than as afsd, and
which scheme is dated the 17th day of May, 1893, whereof a copy can
be seen at the offices of the bank in London, Edinburgh, Melbourne,
Sydney, Adelaide, and Brisbane between the hours of ten and four on
each week day prior to the day of the meeting, and that such meetings
willresply be held on Monday, the 12th day of June, 1893, at 12 o'clock
at noon for the sd creditors, and at 2.30 o'clock in the afternoon for the
sd contributories, at, &c., in the City of London, England, at which
time and place all the afsd creditors and contributories are requested
to attend.

The sd creditors and contributories may attend such meetings and
vote in person, or by proxy, provided that all proxies given by creditors
and contributories in Europe or elsewhere than in Australia must be
deposited at the offices of the bank, situated at 38, Lombard Street,
London, or at 64, Queen Street, Edinburgh, not later than three days
before the holding of the sd meeting.

All proxies given by creditors in Australia must be deposited at the
head offices of the bank, viz., either Melbourne or Sydney, not less
than three days prior to the date of the sd meetings. Particulars of
proxies so deposited in Melbourne and Sydney, sufficient to enable
them to be used at the sd meetings, will be sent by telegram to the
off recr and prov liqr. The Ct has appointed S., the off recr and
prov liqr, to act as chairman of the sd meetings.

The above scheme will be subject to the subsequent approval of
the Ct.

Dated this 31st day of May, 1893.

A. and B., Buildings, London,

Solors for the sd C. J. S., the Off Recr and Prov Liqr of the sd Bank,

See i?e English, Scottish, and Australian Chartered Bank, (1893) 3 Ch. 385, inwhicli
it was held that the telegram sent as mentioned in the above was sufficient to enable
the proxy here to vote.

{Title as in Form 816.) Form 824.

Notice is hby given that Mr. Registrar Hood has directed separate Another.
meetings of (1) the unsecured creditors, including the depositors of the



above-named coy, exceptHer Majesty's Government and any creditors by
law or by tbe provisions of the scheme hnf tr mentd entitled to payment
in full of their claims, and (2) of the shareholders of the above-named
coy to be summoned pursuant to the above statutes for the purpose of
considering, and, if thought fit, approving, a scheme of arrangement
proposed to be made between the above-named coy and such unsecured
creditors including the sd depositors, and which scheme of arrangement
is embodied in an agreemt dated this day and made between the sd
coy and C, as liqr thof, of the one part, and the Bank of China and
Japan, Limtd, of the other part, whereof a copy can be seen at the

office of the liqr's solors, Messrs. , of , between the hours

of 11 and 2 on each week day prior to the day of meeting, and
that such meetings will resply be held on Wednesday, the 6th day
of March, 1895, at 12 o'clock at noon for the creditors, and at 2 o'clock
in the afternoon for the shareholders, at the Cannon Street Hotel,
Cannon Street, in the Citj^ of London, at which time and place all the
afsd creditors and shareholders are requested to attend. The sd
Mr. Registrar Hood has appointed N. to act as chairman of the
meeting of creditors, and has appointed the sd C, the liqr, to act as
chairman at the meeting of shareholders.
Dated the 21st day of February, 1895.

A. and B., Street, London, E.C.,

Solors for the Liqr.

Form 825.

stock in new
company for
debentures ;
shares not
fully paid
for existing

Arrangements for Transfer to New Company.

Imperial Ppt}' Investment Coy, Limtd.
(Below referred to as the present coy.)
Scheme of Arrangement.
1. A new coy shall be incorporated under the Cos Acts, 1862 to 1893,
as a coy limtd by shares. The name of the new coy shall be Imperial
Ppty Investment Coy, Limtd, or if any difiiculty arises as to registering
under that name then such other name as the liqr of the j^resent coy
shall select. The nominal capital of the new coy shall be 250,000/.,
divided into 25,000 preference shares of 5/. each, and 25,000 ordinary
shares of bl. each. The sd preference shares shall confer on the
holders the right to be pd out of the profits of each year available for
dividend a preferential dividend for such year at the rate of 5/. p.c.p.a.
on tlio capital for the time being pd up thereon, and such shares shall
rank both as regards dividend and capital in priority to the ordinary
shares. The objects of the new coy shall include the acquisition and
undertaking of all or any of the assets and liabilities of the present
coy. Tlio memdum and articles of association shall bo framed in
accordance with tho di-afts which have abeady been prepared with the


privity of the liqr of tlio present coy. The first directors of the now
coy shall be the several persons who wore directors of the present coy
at the commencement of the winding-up thof.

It is desirable to refer to a specific draft of the memorandum and articles of
association ; but sometimes the settlement thereof is left to the liquidator, or to
some named member of the Bar. There are, however, grave objections to such a
course, for the scheme is incomplete without knowledge of the terms of such

As to directors, it is sometimes provided that the first directors, or some of them,
shall be selected at the meetings to ai^prove of the scheme.

2. The liqr of the present coy shall enter into an agreemt with the
new coy for the transfer to the new coy, upon the footing and subject
to the provisions of this scheme, of the assets of the present coy, in-
cluding the capital called and to be called pursuant to clause 5 hereof.

An agreement is necessary to bind the new company, and for filing pursuant to
s. 25 of the Companies Act, 1867- See p. 4oG.

The uncalled capital is clearly part of the assets of a company which is being
wound up {TJ'db v. Whiffin, L. R., 5 H. L. 735 ; Birch v. Cropper,' l-i Ap. Cas. 543),
and may therefore be disposed of under a scheme of composition or arrangement,
and it is a common practice to sell it subject to provisions as in clauses 5 and 8 of
this scheme.

3. The new coy shall constitute a debenture stock of the nominal
amount of 400,000^., carrying interest at the rate of 4/. 10s. p.c.p.a.,
and secured (a) by specific charge on the uncalled capital, (b) by specific
charge on freehold and leasehold jjpty of the coy, and (c) by a floating
charge on all the other assets of the coy, and the trust deed constituting
and securing such debenture stock shall be framed in accordance with
the di-aft which has abeady been approved by the liqr of the present
coy, and the trustees thof shall be selected by the liqrs. The debenture
stock is to be redeemed by the operation of a sinking fund as provided
by the trust deed.

For fonns of trust deed, see Part I., pp. 702 et seq.

4. Each debenture holder of the present coy shall accept in satisfac-
tion and discharge of his debentures of the present coy an amount of
the sd debenture stock ec[ual to the amount of the principal moneys
secured by such debentures, and upon receiving notice of the allot-
ment of such stock, he shall forthwith surrender to the new coy his
debentures afsd, and shall be entitled in exchange therefor to a
certificate of title to such debenture stock. The interest on the stock
issued under this clause shall run as from the 1st of Aug., 1894, and
the coy shall pay any interest due on the surrendered debentures up to
the 1st of Aug., 1894, in cash upon such surrender.

5. Subject as hnftr provided: —

(a) The liqr shall forthwith enforce payment of all moneys due in


respect of the call of 11. 10s. per share, payable on the
tSOth June, 1894, or at the option of the new coy shall transfer
the same or any part thof to the new coy.

(b) The liqr shall forthwith call up the remaining 5/. per share, being

the full amount of the capital now uncalled on the shares in
the present coy.

(c) All moneys from time to time collected under this clause shall

forthwith be pd over to the new coy or its nominees.

(d) In taking steps under this clause the liqrs shall act under the

supervision and instructions of the new coy, and it shall rest
with the new coy to sanction any compromise or arrangement
which it may think expedient.

6. Every member of the present coy shall in respect of each share
of 10/. therein held by him be entitled to claim from the new coy
one hi. prefei'ence share in the new coy with the sum of 11. 10s. credited
as pd up, and one ordinary share in the new coy with the sum of
11. 10s. credited as pd up thereon, and. the new coy shall comply with
every such claim ; but the new coy shall not be bound to allot any such
shares, unless the member claims both the preference and the ordinary
shares which he is entitled as afsd to claim, nor unless the member
within four weeks from the time when this scheme shall be sanctioned by
the Ct, by writing addressed to the new coy and countersigned by the
sd liqr, claims his allotment, and in view of this provision, the liqr
shall, within fourteen days after this scheme shall be sanctioned as
afsd, give to each member of the present coy notice of the sanction
thof and of the provisions of this clause, and such notice shall be
given by circular letter sent through the post and addressed to the
member at his registered address, as appearing in the register of
members of the present coy.

7. As regards imclaimed shares the liqr shall use his best endeavours
to sell the same, with full power to sell such shares, together or in lots,
and from time to time as and when he may think fit, and shall divide
the net proceeds of such sale rateably among the non-claiming members
of the present coy, and when any such sale is made, the new coy
shall, on the nomination of the liqr of the present coy, allot to the
purchaser or purchasers the shares sold to them credited as pd up to
the extent afsd; and in this clause "unclaimed shares" means any
shares in the new coy which members of the present coy, though
entitled, omit to claim Avithin the period afsd.

8. Any shareholder in the present coy who, within the period of four
weeks after this scheme is sanctioned, or within such extended period,
if any, as the new coy may allow, claims the allotment of the shares
which he is entitled to claim under clause hereof, shall be relieved
from all liability to pay up the call of 5/. per share, to bo made on him
pursuant to clause 5 hereof, but any shareholder in the present coy


■who witliiii sucli period, or extended period, does not make such, claim,
shall lose all right to claim such allotment, and shall remain liable to
pay up in full all moneys payable hereunder in respect of his shares in
the present coy, with interest thereon, including the sd call of bl. per
share to be made pursuant to clause 5 hereof.

9. The new coy shall pay all the costs, charges and expenses of and
incident to the winding-up of the present coy, including the costs of
and incident to this scheme, and the carrying the same into effect.

10. Subject to the provisions of this scheme the new coy shall take
over and discharge all the debts and liabilities of the present coy,
including the existing mortgages, and shall indemnify the present coy,
its liqr and contributories in respect thereof ; but the sd liqr shall be
at liberty, out of the assets, to satisfy any of the debts owing to
creditors of the present coy, other than the sd debenture holders in
respect of their debentures afsd.

11. As soon as conveniently maybe after this scheme becomes bind-
ing, the present coy and its liqr shall resply execute and do all such
assurances and things as may be necessary for carrying out this

12. As soon as this scheme becomes binding the new coy shall
execute a deed-poll covenanting with the debenture holders and other
secured and unsecured creditors of the present coy, to perform and
fulfil its obligations under this scheme, so far as affects such deben-
ture holders and other creditors.

The object of this deed is to give tlie creditors a direct right of action against the
new company.

13. Unless this scheme is duly adopted by the new coy within six
weeks after it is sanctioned, by the Ct, the liqr may, with the sanction
of the Ct, declare that this scheme has fallen through ; and the scheme
shall thereupon be regarded as annulled.

14. The liqr may assent to any modification of this scheme, or to
any conditions the Ct may think fit to approve or impose.

15. Nothing in this scheme contained shall affect any charge, lien or
security, except as hinbefore provided.

The above scheme was sanctioned by Vaughan "Williams, J., in A\;gust, 1894.


As provided by the articles of association of the new coy, no transfer Form 826.
of shares not being fully pd up shares taken up pursuant to this

scheme in the new coy shall be registered by the directors of the new qq transfer
coy, unless in their opinion the transferee is at least as solvent as the of shares.



transferor, and "whenever a transfer is registered the transferor shall
remain liable as surety for the payment in due course by the transferee,
or those claiming under him, of the uncalled portion of the capital duo
on the shares transferred, and shall sign and deliver to the coy a
guarantee accordingly.

Where the shares in the new company are to be issued with a considerable liability
thereon, it is very common now to insert a provision as above.

The above clause is taken from the scheme sanctioned by Vaughan Williams, J.,
in lie The National Insurance, ^-c., Limited, in 1894. Another form will be found in
the case of the Neiv Zealand, ^-c. scheme, 6th ed. of this work, Part II., p. 680.

In the Securities Insurance Co., scheme sanctioned 28th October, 1896, there was a
similar clause, the words " imless they consider it advisable to do so " being used.

Form 827.

Scheme not
to bar mis-

This scheme is not to be a bar to any proceedings which shall be
directed b}^ the Ct to be taken under sect. 10 of the Cos "Winding-up
Act, 1890, and the new coy shall, as a part of the agreemt for the
transfer of the assets of the old coy to be entered into ixnder clause 4
hereof, undertake to apply such portion of the assets as may be required
to meet the costs of any such proceedings, and shall not, without the
sanction of the Ct, directly or indirectly compromise any such proceed-
ings or release any claim thereunder, and shall be entitled to the
benefit of all moneys recovered as the result of any such proceedings.
JVaiional, Sfc. Co., Yaughan Williams, J., 1894; Secicriiics Insurance,
28th Oct., 1896.

Vaughan Williams, J., now usually requires the insertion in a scheme of a clause
as above. See his Lordship's observations on the subject. Weekly Notes, 1894,
p. 166. The learned judge said that in the absence of such a clause the delinquent
directors of the old company might escape altogether, and that in future he would
not sanction any scheme which did not contain such a clause, but that his remarks
•would not apply where a company was perfectly solvent, and what was being done
was a mere operation of selling to a new company. Where the scheme does not
contain such a clause the learned judge usually requires the new company to enter
into an undertaking to the same effect, and sometimes to execute a deed of covenant
accordingly. This was the course adopted in the case of the arrangement by the
Liberator Bixilding Society, sanctioned in 1895, as follows : —

Form 828 -'■^^ ^^^ ^'^^ shall undertake to obey the order of the Ct as to any

proceedings which the Ct may think it right to have taken against the

no Lcr. officers of the liquidating estates and others, and to provide the neces-

sary funds for such proceedings.

The following is an extract from an order sanctioning a scheme : — " The liqui-
dator shall be at liberty, if ho f'hall so tliiuk fit (or shall bo rc<xuired by the Court),
to initiate proceedings under sect. 10 of the Companies (Winding-up) Act, 1890, and
the costs of the liquidator incidental to or incurred by him, or which he shall be
ordered to pay in connection with such proceedings, shall be paid by the new


company out of the assets thereof, and it is a condition that the authority of the
liquidator so to proceed shall not at any time be revoked by the new company."
Bank of China, ^-c, Limited, Vaughan Williams, J., 1894.

The following' is another example : — •

" And it is ordered that by the assignment of the undertaking and property of
the above-named company to the new company referred to in the said scheme, the
riglits of the official receiver and liquidator to take any proceedings which the Court
may think it right to have taken, or which the liquidator may be advised to take
under or by virtue of sect. 10 of the Companies (Winding-ujj) Act, 1890, against the
officers of the above-named company and others shall be reserved, and tlie proceeds
of any such proceedings shall be held by the official receiver and liquidator for the
benefit of the unsecured creditors of the above-named company." Objmpia, (1895).

The debentures of tlie new coy to be issued pursuant to this scheme Form 829.

shall exclude from the general charge therein contained the stock-in- '~„ ^

, f, , Clause m

trade and uncalled capital of the coy. scheme limit-

ing debenture
During the last twenty years great numbers of schemes have been sanctioned in char^'e.

which provision has been made for the issue by the new company of debentures or
debenture stock or other securities charged on the whole undertaking of that
company, and for the distribution of such securities amongst the debenture holders
or creditors of the old company. Jessel, M. R., Malins, V.-C, Bacon, V.-C,
HaU, V.-C, Chitty, J., North, J., Kekewich, J., and Stirling, J., have repeatedly
sanctioned schemes containing such provisions, and in several cases the Court of
Appeal has also sanctioned such schemes ; but of late Vaughan "Williams, J., has
objected to such provisions, on the ground that a general charge on all the property,
present and future, of the new company is prejudicial to the future creditors of such
company, and accordingly in several cases his Lordship has, in sanctioning the
scheme, imposed a condition that the charge shall be waived as regards part of the
assets of the new company. Such a condition is specially hard where the debenture
holders who are to receive the new securities have, by virtue of their existing
debentures, a charge on the whole of the assets of the old company, and in many
cases its imposition seriously alters the character of the scheme.

Why should such a condition be imposed against the wish of the parties interested
merely because the Court does not approve of the law as it stands ? It would seem
preferable to require the insertion of clauses in the articles and otherwise to insure
that those who deal with the company shall have notice that there is a general charge
on the undertaking of the company.

Every holder of a founders' share in the old coy shall be entitled to Form 830.

claim at any time within one month after this scheme is sanctioned, or „ ,, ".
•^ Holders of

within such extended time (if any) as the new coy shall allow, an founders'
allotment of one fully pd up ordinary share of 3/. in the new coy, in shares entitled
respect of each founders' share in the old coy held by him, and the paid ordinary
new coy shall allot all shares so claimed. National Insurance. Sane- shares,
tioned, 1894.
In the above case the founders' shares were really not entitled, in the circum-



stances, to anything; but Vaughan Williams, J., at tlie instance of a dissatisfied

Online LibraryFrancis Beaufort PalmerCompany precedents for use in relation to companies subject to the Companies acts, 1862 to 1890 ... (Volume 2) → online text (page 93 of 134)