Composition or scheme of arrangement.Composition or scheme of arrangement.

Composition or scheme of arrangement.

E.B.A., ss. 16, 21.

N.S.W., s. 19.

Vic., ss. 248, 249 and 1897, s. 73.

Q., s. 134.

S.A., ss. 234–241.

W.A., ss. 17, 21.

71.—(1.) Where a bankrupt intends to make a proposal—

(a) for a composition in satisfaction of his debts, or

(b) for a scheme of arrangement of his affairs,

he shall lodge with the trustee a proposal in writing, signed by him, embodying the terms of the proposed composition or scheme, and setting out particulars of any sureties or securities proposed.

(2.) The trustee shall hold a meeting of creditors, and shall send to each creditor, before the meeting, a copy of the bankrupt’s proposal with a report thereon; and if a special resolution is passed thereat accepting the proposal, it shall be deemed to be duly accepted by the creditors.

(3.) The bankrupt may at the meeting amend the terms of his proposal, if the amendment is, in the opinion of the majority of the creditors, likely to benefit the creditors generally.

(4.) Any creditor who has proved his debt may assent to or dissent from the proposal by letter, in the prescribed form, addressed to the trustee so as to be received by him not later than the day before the meeting, and the assent or dissent shall have effect as if the creditor had been present and had voted at the meeting.

(5.) The bankrupt or the trustee may, after the proposal is accepted by the creditors, apply to the Court to approve it, and notice of the time appointed for hearing the application shall be given to each creditor who has proved.

(6.) If, in the opinion of the Court it is desirable that the bankrupt should be publicly examined in accordance with this Act, the Court shall adjourn the hearing of the application until after the bankrupt has been publicly examined, and any creditor who has proved may, notwithstanding that he may at a meeting of creditors have voted for the acceptance of the proposal, be heard by the Court in opposition to the application.

(7.) The Court shall, before approving the proposal, hear a report of the trustee as to its terms, and as to the conduct of the bankrupt and any objections made by or on behalf of any creditor.

(8.) If the Court is of opinion that the terms of the proposal are unreasonable, or unlikely to benefit the creditors generally, it shall refuse to approve the proposal, and if it is of opinion that an offence against this Act has been committed by the bankrupt, it may refuse to approve the proposal.

(9.) If any facts are proved on proof of which the Court would be required either to refuse, suspend, or attach conditions to the bankrupt’s discharge, the Court shall refuse to approve the proposal, unless it provides reasonable security for payment of not less than Five shillings in the pound on all the unsecured debts provable against the debtor’s estate.