The creditors compromise

In some circumstances a creditors compromise can achieve the best outcome for unsecured creditors, through avoiding the impact of cessation on the business.  A creditors compromise can be proposed by the company’s board of directors, a receiver, liquidator or with the leave of the Court, any creditor or shareholder of the company.
 

In order to succeed, a compromise plan must be submitted to a meeting of creditors under the terms of the Companies Act 1993, which are quite prescriptive. To be binding, the compromise scheme must be adopted by a majority in number and representing 75% in value of creditors attending the meeting or voting by proxy.
 

We are experts as compromise managers and can provide advice to creditors and shareholders on the best way to approach this alternative to a more direct recovery action.