A scheme of arrangement is an English statutory procedure regulated by Part 26 (Arrangements and Reconstructions) of the Companies Act 2006 (formerly sections 425 to 427 of the Companies Act 1985). Part 26 of the Companies Act 2006 came into force on 6 April 2008, although legislation permitting schemes of arrangement in various forms has existed for over a century. The statutory provisions allow a company to reach a binding compromise or arrangement with its members or creditors, or any class of them. This article looks at:
- The background to schemes of arrangement.
- Preparation and procedural requirements.
- The sanctioning of a scheme.
- Case law developments.
- Overseas recognitions and enforcement of schemes.
This chapter was first published in the PLC Cross-border Insurance and Reinsurance Handbook 2010 and is reproduced with the permission of the publisher, Practical Law Company.