On 19/05/2013,
you requested for the version in force on 19/05/2013
incorporating all amendments published on or before 19/05/2013.
The closest version currently available is that of 01/03/2012.
PART V
VOLUNTARY ARRANGEMENTS
Moratorium for insolvent debtor
44. This Part shall not apply —
(a)
to any individual debtor who is an undischarged bankrupt; or
(b)
to any firm against which a bankruptcy order has been made and from which bankruptcy the partners in the firm have not been discharged.
45.
—(1) Subject to subsection (2), any insolvent debtor who intends to make a proposal to his creditors for a composition in satisfaction of his debts or a scheme of arrangement of his affairs (referred to hereinafter as a voluntary arrangement) may apply to the court for an interim order under this Part.
(2) No partner in an insolvent firm shall apply to the court for an interim order in respect of the firm unless all or a majority of the partners in the firm join or intend to join in the making of the proposal for a voluntary arrangement.
(3) An interim order shall have the effect that, during the period for which it is in force —
(a)
where the interim order is in respect of an individual debtor —
(i)
no bankruptcy application may be made or proceeded with against the debtor; and
(ii)
no other proceedings, execution or other legal process may be commenced or continued against the person or property of the debtor without the leave of the court; and
(b)
where the interim order is in respect of a firm —
(i)
no bankruptcy application may be made or proceeded with against the firm or, except with the leave of the court, any partner therein; and
(ii)
no other proceedings, execution or other legal process may be commenced or continued against the firm or its property or against the person or property of any partner in the firm, without the leave of the court.
[42/2005]
(4) An interim order shall cease to have effect 42 days after the making thereof unless the court otherwise directs.
[37/99]
46.
—(1) Every debtor making a proposal for the purpose of this Part shall in such proposal appoint a nominee to act in relation to the voluntary arrangement either as trustee or otherwise for the purpose of supervising its implementation.
(2) No person shall be appointed as a nominee unless he is —
(a)
registered as a public accountant under the Accountants Act (Cap. 2);
(b)
an advocate and solicitor; or
(c)
such other person as the Minister may, by order published in the Gazette, prescribe.
(3) The Minister may make rules prescribing the scale of fees to be charged by nominees assisting debtors in respect of voluntary arrangements.
[37/99]
47.
—(1) At any time when an application under section 45 for an interim order is pending, the court may stay any action, execution or other legal process against the debtor in respect of whom the application has been made or the property of such debtor.
(2) Any court in which proceedings are pending against a debtor may, on being satisfied that an application under section 45 for an interim order has been made in respect of the debtor, stay the proceedings or allow them to continue on such terms as the court may think fit.
(3) Where the debtor in respect of whom an application under section 45 for an interim order is pending is a firm, the power of the court under subsections (1) and (2) shall apply to any action, execution or other legal process or proceedings against the person or property of any partner in the firm.
48.
—(1) The court shall not make an interim order on an application under section 45 unless it is satisfied that —
(a)
the debtor intends to make a proposal for a voluntary arrangement;
(b)
no previous application for an interim order has been made by or in respect of the debtor during the period of 12 months immediately preceding the date of the application; and
(c)
the nominee appointed by the debtor’s proposal is qualified and willing to act in relation to the proposal.
(2) The court may make an interim order if it thinks that it would be appropriate to do so for the purpose of facilitating the consideration and implementation of the debtor’s proposal.
49.
—(1) Where an interim order has been made, the nominee shall, before the order ceases to have effect, submit a report to the court stating —
(a)
whether, in his opinion, a meeting of the debtor’s creditors should be summoned to consider the debtor’s proposal; and
(b)
if in his opinion such a meeting should be summoned, the date on which, and the time and place at which, he proposes the meeting should be held.
(2) For the purpose of enabling the nominee to prepare his report, the debtor shall submit to the nominee —
(a)
a document setting out the terms of the voluntary arrangement which the debtor is proposing; and
(b)
where the debtor is an individual, a statement of his affairs containing —
(i)
such particulars of his assets, creditors, debts and other liabilities as may be prescribed; and
(ii)
such other information as may be prescribed; or
(c)
where the debtor is a firm, a statement of its affairs containing —
(i)
such particulars of the assets, creditors, debts and other liabilities of the firm and of each partner therein, as may be prescribed; and
(ii)
such other information as may be prescribed.
(3) Where the nominee has failed to submit the report required by this section within the time given, the court may, on an application made by the debtor, do one or both of the following:
(a)
direct that the nominee shall be replaced by another person qualified to act as a nominee;
(b)
direct that the interim order shall continue, or if it has ceased to have effect be renewed, for such further period as the court may think fit.
(4) The court may, on the application of the nominee, extend the period for which the interim order has effect so as to allow the nominee to have more time to prepare his report.
(5) If the court is satisfied on receiving the nominee’s report that a meeting of the debtor’s creditors should be summoned to consider the debtor’s proposal, the court shall direct that the period for which the interim order has effect shall be extended for such further period as it may think fit, for the purpose of enabling the debtor’s proposal to be considered by the debtor’s creditors in accordance with the following provisions of this Part.
(6) The court may discharge the interim order if it is satisfied, on the application of the nominee —
(a)
that the debtor has failed to comply with subsection (2); or
(b)
that for any other reason it would be inappropriate for a meeting of the debtor’s creditors to be summoned to consider the debtor’s proposal.
50.
—(1) Where a nominee has reported to the court under section 49 that a meeting of the debtor’s creditors should be summoned, the nominee shall, unless the court otherwise directs, summon that meeting in accordance with his report.
(2) The nominee shall summon to the meeting every of the debtor’s creditors of whose claim and address he is aware.
Consideration and implementation of debtor’s proposal
51.
—(1) A creditors’ meeting summoned under section 50 may, if the meeting thinks fit, by special resolution resolve to approve the proposed voluntary arrangement, whether with or without modification.
(2) The meeting shall not approve the proposed voluntary arrangement with any modification unless the debtor has consented to such modification.
(3) For the purpose of this section, a modification subject to which a proposed voluntary arrangement may be approved by a creditors’ meeting may confer the functions proposed to be conferred on the nominee on another person qualified to act as a nominee.
(4) No modification under subsection (3) shall alter the proposal to such an extent that it ceases to be a proposal for a voluntary arrangement by the debtor.
(5) The meeting shall not approve any proposal or any modification thereto which affects the right of a secured creditor of the debtor to enforce his security, except with the concurrence of the secured creditor concerned.
(6) The meeting shall not, without the concurrence of the preferential creditor concerned, approve any proposal or any modification thereto under which —
(a)
any debt of the debtor, not being a preferential debt, is to be paid in priority to any preferential debt of the debtor; or
(b)
any preferential debt of the debtor is to be paid in relation to any other preferential debt of the debtor other than in accordance with section 90.
(7) Every meeting shall be conducted in accordance with the prescribed rules.
(8) Any debtor who makes any false representation or commits any other fraud for the purpose of obtaining the approval of his creditors to a proposal for a voluntary arrangement shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 2 years or to both.
52.
—(1) After the conclusion of the creditors’ meeting summoned under section 50, the nominee shall report the result thereof to the court and shall serve a copy of the report on such persons as may be prescribed.
(2) Where the meeting has declined to approve the debtor’s proposal, the court may discharge any interim order which is in force in relation to the debtor.
53.
—(1) Where the creditors’ meeting summoned under section 50 has approved the proposed voluntary arrangement, whether with or without modifications, the approved arrangement shall —
(a)
take effect as if made by the debtor at the meeting; and
(b)
bind every person who had notice of and was entitled to vote at the meeting, whether or not he was present or represented thereat, as if he were a party to the arrangement.
(2) Subject to section 54, the interim order in force in relation to the debtor shall cease to have effect at the end of 28 days from the date the report was made to the court under section 52.
(3) Where proceedings on a bankruptcy application have been stayed by an interim order which ceases to have effect under subsection (2), that application shall, unless the court otherwise orders, be deemed to have been dismissed.
[42/2005]
54.
—(1) Any debtor, nominee or person entitled to vote at a creditors’ meeting summoned under section 50 may apply to the court for a review of the decision of the meeting on the ground that —
(a)
the voluntary arrangement approved by the meeting unfairly prejudices the interests of the debtor or any of the debtor’s creditors; or
(b)
there has been some material irregularity at or in relation to the meeting.
(2) Upon hearing an application under subsection (1), the court may, if it thinks fit, do one or both of the following:
(a)
revoke or suspend any approval given by the meeting;
(b)
direct any person to summon a further meeting of the debtor’s creditors to consider any revised proposal the debtor may make or, in a case falling within subsection (1)(b), to reconsider the original proposal of the debtor.
(3) No application under this section shall be made after 28 days from the date the report was made to the court under section 52.
(4) Where at any time after giving a direction under subsection (2)(b) for the summoning of a meeting to consider a revised proposal the court is satisfied that the debtor does not intend to submit such a proposal, the court shall revoke the direction and revoke or suspend any approval given at the previous meeting.
(5) Upon giving a direction under subsection (2)(b), the court may, if it thinks just, extend the validity of any interim order in relation to the debtor for such period as it may think fit.
(6) Upon giving a direction or revoking or suspending an approval under this section, the court may give such supplemental directions as it may think fit and, in particular, directions with respect to —
(a)
things done since the meeting under any voluntary arrangement approved by the meeting; and
(b)
such things done since the meeting as could not have been done if an interim order had been in force in relation to the debtor when they were done.
(7) Except in pursuance of this section, no approval given at a creditors’ meeting summoned under section 50 shall be invalidated by reason only of any irregularity at or in relation to the meeting.
55.
—(1) Where a voluntary arrangement approved by a creditors’ meeting summoned under section 50 has taken effect, the nominee shall supervise the implementation of the voluntary arrangement.
(2) If the debtor or any of his creditors is dissatisfied by any act, omission or decision of the nominee in his supervision of the implementation of the voluntary arrangement, the debtor or creditor may apply to the court to review that act, omission or decision.
(3) On hearing an application under subsection (2), the court may —
(a)
confirm, reverse or modify any act or decision of the nominee; or
(b)
give such directions to the nominee or make such order as it thinks fit.
(4) The nominee may apply to the court for directions in relation to any particular matter arising under the voluntary arrangement.
(5) The court may, whenever —
(a)
it is expedient to appoint a person to carry out the functions of the nominee; and
(b)
it is inexpedient, difficult or impracticable for such an appointment to be made without the assistance of the court,
make an order appointing a person who is qualified to act as a nominee, either in substitution for the existing nominee or to fill a vacancy.
56. Where a debtor fails to comply with any of his obligations under a voluntary arrangement, the nominee or any creditor bound by the voluntary arrangement may make a bankruptcy application against the debtor in accordance with Part VI.
[42/2005]