Commentary

236 Advantages of scheme of arrangement

COMPANIES vol 11 acquisitions, mergers, demergers
| Commentary

236 Advantages of scheme of arrangement

| Commentary

D: COMPANY REORGANISATIONS UNDER A SCHEME OF ARRANGEMENT (COMPANIES ACT 2006 PART 26)

1: INTRODUCTION TO COMPANY REORGANISATIONS UNDER A SCHEME OF ARRANGEMENT

236 Advantages of scheme of arrangement

Although use of the procedure set out in Section 110 of the Insolvency Act 1986 may be useful in some circumstances, it does have several drawbacks1. Creditors are not bound to accept the purchasing company’s securities or unsecured liability in satisfaction of their claims as a result of a reorganisation under that section unless each of them agrees to a novation of his rights. Further, there is no flexibility in the way in

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