Charles Mac Naughten Sir Francis Beaufort Palmer.

Company precedents for use in relation to companies: subject to ..., Volume 2 online

. (page 108 of 152)
Online LibraryCharles Mac Naughten Sir Francis Beaufort PalmerCompany precedents for use in relation to companies: subject to ..., Volume 2 → online text (page 108 of 152)
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binding, the present coy and its liqr shall resply execute and do aU
such assurances and things as may be necessary for canying out this
scheme.



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AEBANGEIIENTS — ^FORMB. 861

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 obb'gations under this scheme, so far as affects such deben-
ture holders and other creditors.

The object of this deed is to giye the creditors a direct right of action agpainst the
new companj.

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 Ot, declcure 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 hnbef ore provided.

The above scheme was sanctioned by Vaughan Wilhams, J., in Angast, 1894.



MISCELLANEOUS CLAUSES.

This scheme is not to be a bar to any proceedings which shall be Porm 864.
directed by the Ct to be taken xmder sect. 10 of the Cos (Winding-up) g^iieme not
Act, 1890, and the new coy shall, as a part of the agreemt for the to bar mis-
transfer of the assets of the old coy to be entered into under clause 4 ™^^jfg
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.
National f Sfc. Co,^ Vaughan Williams, J., 1894 ; Securities Insurance ,
28th Oct. 1896. Followed by Wright, J., in Siberian Goldfields
Development Co,, Times, Aug. 12, 1901.

Yanghan Williams, J., nsuaUy required the insertion in a scheme of a olanse as
above. See his Lordship's observations on the subject, Weekly Notes, 1894, p. 166.
The learned judg^e 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 sanc-
tion 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 did not contain
suoh a clause the learned judge usually required the new company to enter into an



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862



ABBAKGEMENTS — ^FORMS.



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 hj the
Liberator Building Society, sanctioned in 1895, as in Form 866.

As to the proceeds belong^g to the old company, see Ofympia, Limtd^ 16
T. L. E. 564.



Form 865. The new coy shall undertake to obey the order of the Ct as to any
Another. proceedings which the Ct may think it right to have taken against liie

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 he at liherty, if he shall so think fit (or shall he required hy 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 hy him, or which he shall be
ordered to pay in connection with such i»x)oeeding^, 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 ChmUy ^., LimiUdy 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
rights 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-up) Act, 1890, against the
officers of the above-named company and others shall be reserved, and the proceeds
of any such proceedings shall be held by the official receiver and liquidator for the
benefit of the imsecured creditors of the above-named company." OlympiOy 1895.



Form 866.

Nomination
of directors.



The first directors of the new coy shall be eight in number, and five
of them shall be nominated by the policy holders of the old coy at the
meeting to which this scheme is submitted for approval, and the other
three by the shareholders of the old coy at the meeting to be called to
approve of this scheme. National Insurance, Sanctioned in 1895 ; see
Form 831 in 6th ed. of this work, Part 11. p. 684 ; and see Form 870,
clause 1, infra.



Form 867.

Sale to new
company.
Division of
cash and
debentures in
new company
amongst old



HoB8 Bay Hematite, &c. Coy, Limtd.

1. A new coy shall be incorporated, &c. The first directors of the
new coy shall be nominated by the liqr of the old coy subject to the
approbation of the judge.

2. The liqr shall enter into an agreemt with the new coy for the
transfer to the new coy, upon the footing and subject to the provisions



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863



of tliifl solieine, of all the assets of the old coy, including those mort- debenture
gaged or charged, but excluding any uncalled capital of the old coy.

3. The holders of debentures .of the old coy charged on the ppty
of the old coy shall, in respect of such debentures, be dealt with as
follows, that is to say : —

(a) The sum of 25,000/. in cash shall be provided for their benefit

out of the proceeds of the call of 3/. per share on the 17,122
ordinary shares of the old coy which has been made by order
of the Ct.

(b) Ninety-two thousand pounds A. debentures of the new coy shall

be provided for their benefit.
And such cash and debentures shall be divided among them in pro-
portion to the amount owing to them resply by the old coy in respect
of such debentures, and they shall accept the same in full satisfaction
and discharge of such debentures, and the assets of the old coy shall
stand freed and discharged from all claims in respect of such deben-
tures, and the holders thof shall give up to the new coy such debentures,
and if required by the new coy shall execute such releases and sur-
renders as the new coy may desire.

4. The unsecured creditors of the coy shall be dealt with as follows,
that is to say : —

(1.) The following amounts, namely : —

(a) The sum of 26,000/. shall be provided {pari passu with the

25,000/. mentd in clause 3 hereof) out of the proceeds of the
sd call of 3/. per share which has been made by order of
theCt;

(b) The net proceeds arising from the sale of the shares in the

Pacific Investment Coy, limtd, and the Anstruther and St.
Andrews Eailway, belonging to the old coy, which sale shall
be made by the liqr of the old coy, with all convenient speed
after this scheme becomes binding ;

(c) Such part of the cash assets in the hands of the old coy or its

liqr, as with the above shall be sufficient to pay to the un-
secured creditors a dividend of 10«. in the pound on the
amount due to them resply,
shall be divided among the unsecured creditors of the old coy in pro-
portion to the amount due to them resply at the commencement of the
winding-up of the old coy.

(2.) In respect of the balance of the amount due as afsd to each of
the unsecured creditors of the old coy, the new coy shall issue to such
creditor a B. debenture or B. debentures of the new coy for securing
principal moneys equal to the amount of such balance, but any fraction
of 10/. shaU be paid in cash out of the cash assets of the old coy.

(3.) The term '* unsecured creditors " in this clause shall be deemed
to include all the creditors (other than secured creditors) whose daims



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864 ARRANGEMENTS — FORMS.

have been certified by the chief clerk in the winding-up of the old
coj, and all those whose claims shall hereafter be so certified, and
every such creditor shall rank as a creditor for the amount so certified
to be due to him and no more.

5. The unsecured creditors of the old coy shall accept the provisions
in their favour contained in this scheme in full satisfaction and dis-
charge of all their claims as against the old coy and the assets thof.

6. The A. debentures of the new coy shall be limited in amount to
100,000/. They shall carry interest as from the time when this scheme
becomes binding at the rate of 5 p.c.p.a., payable half-yearly on Ihe
Ist day of Jan. and 1st day of July, the first payment to be made on
the 1st day of July next. They shall be for 10/. each, or some multiple
of 10/. They shall be redeemable by annual drawings of not lees
than 5,000/. The A. debentures shall be secured as a first charge on
the undertaking of the coy and its uncalled capital for the time being,
subject, however, as regards the final call of 2/. per share on the sd
17,122 ordinary shares in the new coy, to the prior charge thereon
given to the B. debentures.

7. The B. debentures shall be limited to such amount as may be
required for the purposes of paragraph (2) of clause 4 hereof. They
shall carry interest as from the time when this scheme becomes bind-
ing at the rate of 5 p.cp.a., payable half-yearly on the 1st day of Jan.
and 1st day of July in each year, the first of such payments to be made
on the first of July next. The B. debentures shall be for 10/. each, and
shall be redeemed by annual drawings of not less than 2,500/. The B.
debentures shall be secured as a first charge on the final caU of 2/. per
share on the sd 17,122 shares in the new coy, and as a second charge
on the imdertaking of the new coy and the rest of its uncalled capital
for the time being — that is to say, immediately after the first charge
in favour of the A. debentures. The A. and B. debentures shall resply
be framed in accordance with the forms in that behalf already approved
by the liqr.

8. Notwithstanding anything afsd, all creditors of the old coy, if any,
who by virtue of the Cos Act, 1888, or otherwise, are entitled to be
pd in full in priority to other debts shall be pd in full by the liqr out
of the assets of the old coy within fourteen days after this scheme
becomes binding, and clause 4 hereof shall not apply to such creditors.

9. The new coy shall take over and discharge all the debts, liabilities
and contracts of the liqr incurred in carrying on the business of the
old coy since the commencement of the winding-up thof.

10. The new coy shall pay all the costs and charges in connection
with the liquidation of the old coy and the promotion and formation of
the new coy, and the carrying of this scheme into effect.

1 1 . The new coy shall allot to, or to the nominee or nominees of,
each member of the old coy, who within six weeks after being ser?ed



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ARRANGEMENTS — ^FORMS. S66

with such notice as is mentd in dause 12 hereof shall require the
new coy so to do, one preference share in the new coy of 8/. credited as
fuUj pd up, and one ordinary share in the new coy of 10/. credited
as pd up to the extent of 6/. in respect of each folly pd up ordinary
share of 20/. in the old coy held by such member.

12. The liqr shall within fpurteen days after this scheme becomes
binding give notice in writing to each member of the old coy, stating
the number of shares in the new coy which he is entitled, pursuant
to this scheme, to have allotted to him, or his nominee or nominees,
and the amount per share to be credited as pd up thereon, and the
period within which an applicon in writing for the allotment must be
sent to the new coy.

13. As soon as conveniently may be after this scheme becomes bind-
ing, the old coy and its liqr shall resply execute and do all such assur-
ances and things as the new coy may reasonably require for vesting in
the new coy the assets of the old coy, the same in case of difference to
be settled by the Ct, but so long as any of the debts and liabilities of
the old coy (other than its debenture securities), or of the costs, charges,
and expenses afsd remain unpaid, the liqr is to be at liberty to retain
an equivalent part of the sd assets by way of security.

14. All further proceedings in the action of the Cumberland Union
Banking Co. Limtd, v. The Moss Bay Hematite Iron and Steel Co, Limtd,^
1890, 0. No. 1181, shall be stayed, and the receiver shall be discharged,
and all costs of the action shall be pd out of the cash assets of the old
coy.

15. As from the time when this scheme is sanctioned untQ the new
coy is given possession, the liqr of the old coy shall, subject to the
provisions of this scheme, be deemed to be carrying on the business of
the old coy on behalf of the new coy, and shall accordingly account to
the new coy for all benefits received, and be indemnified against all
liabilities and expenses incurred whilst so carrying on the same.

16. Unless this scheme is duly adopted by the new coy within ■
weeks after it becomes binding, the liqr may, with the sanction of the
Ct, declare that the scheme, so far as regards the transfer to a new
coy, has fallen through.

17. Moreover, unless the whole of the ordinary shares in the new
coy, or such proportion thereof, not being less than two-thirds, as the
liqr may think sufficient, shall be taken up within ten weeks after this
scheme becomes binding, the liqr may, with the sanction of the Ct,
dedare that the scheme, so far as regards the transfer to a new coy,
has fallen through.

18. In case any such declaration as afsd is made, the winding-up of
the coy shall proceed in due course, and all the other provisions of
this scheme shall be at an end.

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ARRANGEMENTS — FORMS.



19. The liqr may assent to any inodificatiohs in this scheme or
conditions which the Ct may think fit to approve or impose.

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



Perm 868.

Sale to new
company —
deboiture
stock holders
toreoeiye
cash and
stock.
The share-
holders of
hoth classes
to receive
shares of
one class.



The Tea Corporation, Limtd.

Scheme of Arrangement.

1. A new coy shall be formed under the Cos Acts, 1862 to 1900, aa
a coy limtd by shares, with the same name as the present coy, or with
such other name as may be determined by the liqr with the approval
of the a.

2. The capital of the new coy shall be 70,000/., divided into 70,000
shares of 1/. each. The objects of the new coy shall include the
acquisition and undertaking of all or any of the assets and liabilitieB
of the present coy. The memdum and arts of asson of the new coy
shall be framed in accordance with the draft which has already been
prepared with the privity of the liqr. The first directors of the coy
shall be A. £., T. J. L. and Y. H. 8., or, in case of the refuBal or
inability of any of the sd persons to act as director, some other person
nominated in his place by the liqr with the approyal of the Ot.

3. The liqr shall enter into an agreemt with the new coy for the
adoption of this scheme by the new coy and 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.

4. The new coy shall create First Mortgage Debenture Stock,
charged by way of fixed charge upon its immovable ppfy in Ceylon
and by way of floating charge on the rest of its undertaking, ppty and
assets, and bearing interest at 41, lOs. p.c.p.a. as from the 1st July,
1903. The coy shall be bound to redeem the stock at par on Slst Dec.
1940. The amount of the stock shall be 52,000/. The trust deed
securing the stock shall be framed in accordance with the draft
already prepared with the privity of the liqr. The trees of the stock

shall be the D Corporation, limtd. The debenture , stock is to

be reduced to 40,000/. by purchase or drawings as provided by the
sd draft deedj the new coy for that purpose applying its profits up to
at least 1,000/. per annum.

5. The new coy shall pay to each debenture stockholder of the present
coy a sum in cash equal to 20 p.c. of the nominal amount of his holding and
all arrears of interest thereon to the Ist July, 1903, and shall allot to him
First Mortgage Debenture Stock of the new coy to the amount of 80 p.c.
of his holding, and in exchange for such payment and for the certificate
for such stock of the new coy he shall surrender his debenture stock



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of tjbe old coy and deliver up liis certificate for the same, and shall be
deemed to accept such payment as af sd and the delivery of the certificate
for the stock of the new coy as complete satisfaction for all his daims
in respect of the debenture stock of the old coy.

6. The new coy will take over and discharge all the liabilities of the
old coy (other than its liabilities in respect of the principal and interest
on its debenture stock), and will pay and discharge all the costs,
charges and expenses of the trees of the deed securing the present
coy's debenture stock and of the recr appointed by them and all the
costs as between solor and client of all parties of the action (Sorsbte v.
The Tea Corporation, Limtd, 1902, S. No. 1894), and also all the costs
of and incidental to the winding-up and dissolution of the present coy,
including the costs of and incidental to this scheme, and to canying
the same into effect.

7. Each holder of preference shares in the present coy shall in
respect of each such preference share of 5/. held by him be entld to
claim an allotment of four shares of 1/. each in the new coy, vrith a
sum of 10». per share credited as pd up thereon. Each holder of
ordinary shares in the present coy in respect of each such ordinary
share shall be entld to claim an allotment of one share of 1/. in the
new coy with a sum of 10«. per share credited as pd up thereon.

8. The new coy shall not be bound to allot any shares hereunder to
any person whose registered address in the books of the old coy is in
the United Kingdom, Ireland, the Channel Islands, France, or the
empire of Germany, unless within twenty-eight days from the date of
the posting of the notice to him by the liqr of his right to claim the
shares to which he is entld he shall by writing addressed to the new
coy daim the allotment and shall in respect of each partly pd share
for which he shall apply pay 1«. on applicon. As regards any person
i^hose registered address in the books of the old coy is in Ceylon, the
coy shall not be boimd to allot any shares hereunder to any such
person unless within eight weeks from the date of the posting of the
sd notice he shall by writing addressed to the new coy claim the
allotment and shall in respect of each such share for which he shall
apply pay 1*. on applicon. The balance on each partly pd share
shall be pd as to As. on allotment, and as to bs, within three months
from allotment. The liqr shall within seven days after this scheme
shall be sanctioned as afsd give to each member notice thof at his
registered address.

9. The liqr of the present coy shall sell for what they will fetch
such of the above-mentd shares of the new coy as the members of the
present coy shall be entld to claim but shall not claim within the
period afsd, and the new coy shall allot the sd shares to the purchasers,
and the net purchase-money received by the liqr for the sd shares
(after deducting expenses of sale) shall be distributed rateably amongst

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ARRANaEMENTS — FORMS.



those Bhareholders who were resply endd to claim but did not within
the period af sd claim such shares.

10. As soon as conyeniently may be after this scheme becomes
binding the present coy and the liqr and all other necessary parties
shall do and execute all such deeds and documents as may be neoeesaxy
for the conveyance and transfer to the new coy of the ppty of the
present coy in the terms of this scheme and for otherwise carrying this
scheme into effect. Until the transfer to the new coy of the business
of the present coy in pursuance of such deeds or documents the recr
and the liqr shall be deemed to be canying on the same on account of
the new coy as a going concern, but until the assignment and transfer
the recr and the liqr shall be at liberty to discharge out of the same
any debts and liabilities to be undertaken by the new coy.

11. AU further proceedings in the action of Sorsbie v. The Tea
Corporation J Limtd, 1902, No. 1894, shall be forthwith stayed.

12. All further proceedings in the liquidation of the present coy
shall be stayed except such as may be necessary for carrying into
effect this scheme or the order confirming the same.

13. Unless (a) this scheme is adopted by the new coy within three
weeks after the sanction of this scheme by the Ct, and (b) all the sd
shares to be allotted hereunder are duly allotted within ten weeks after
such sanction, the liqr may with the sanction of the Ct declare that the
scheme has fallen through, and thereupon the winding-up of the
present coy shall proceed in due course and all the other provisions of
this scheme shall be at an end.

14. The liqr may assent to any modification in this scheme or to any
condition which the Ot may think fit to approve or impose.

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

Sanctioned by Buckley, J., 7 Aug. 1903. Order confirmed on appeal
23 Nov. 1903. See W. N. (1903) 198, eupra, p. 841.



Porm869.

Sale to new
oonrpanj —
pre^erenoe
aud ordinary
Bhares to
members of
the old
company.



The Singer Cycle Ooy, Limtd.

ScHEMB OF Arbaiyoement and Heoonstruotion as modified by the
Ct. Sanctioned by order of Buckley, J., 6 Aug. 1903.

1. A new coy shall be incorporated under the Cos Acts, 1862 to
1900, as a coy limtd by shares.

The name of the new coy shaU be " The New Singer Cycle Coy,
Limtd/' or if any difficulty arises as to registering under that name,
then such other name as the liqr of the present coy shall select.

2. The nominal capital of the new coy shall be 125,000/., divided
into 200,000 fully pd preference shares of 7s. 6d. each, and 400,000
fully pd ordinary shares of 2«. 6^^. each. The sd preference shares
shall be entitled to a preferential and cumulative dividend of 6 p.c.p.a.,
and shall be preference as to capital as well as to dividend.



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ARRANGEMENTS — ^FORBiS. 869

3. The objects of the new coy shall include the acquisition of the
undertaking, and all the assets of the present coy with choses in
action. The memdum and arts shall be framed in accordance with
the drafts which have been already prepared. No dividend on the
ordinary shares shall be pd in any year in which the reserve fund to
be created pursuant to the sd arts does not exceed the sum of 25,000/.

4. 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 undertaking and assets of the
present coy.

5. The new coy shall issue 2,000 first mortgage debentures of 80/.,
each carrying interest at the rate of 5/. p.c.p.a., and creating a first
charge on the assets and undertaking of the new coy, and secured by
a debenture trust deed to be executed by the new coy, and to contain
in addition to all ordinary and proper provisions, a conveyance to the
trees of such deed of the freehold premises of the new coy.

6. As part of the consideration for the sd sale the new coy shall
satisfy the daim of the debenture holders of the present coy in'
manner following : —

(a) The new coy shall issue to each debenture holder of the present

coy one first mortgage debenture for 80/., canying interest
at the rate of 5 p.c.p.a. for eveiy 100/. debenture of the
present coy held by him, and each such debenture holder
shall accept the same in exchange for the debentures of the
present coy held by him, and in satisfaction and discharge



Online LibraryCharles Mac Naughten Sir Francis Beaufort PalmerCompany precedents for use in relation to companies: subject to ..., Volume 2 → online text (page 108 of 152)