Section 155 Compromise
Compromise before collapse.
A section 155 compromise can give a viable company a route to restructure debt while the board remains in control. It requires credible information, a workable proposal and sufficient creditor support.
A formal proposal
The proposal explains the company’s position, the treatment of creditors, the funding or assets available and why the outcome is preferable to liquidation.
Creditor approval
Creditors consider and vote on the proposal in accordance with the Companies Act. Careful preparation and engagement are essential because there is no automatic moratorium while the process is underway.
Court sanction and implementation
Once adopted, the proposal may be sanctioned by court and become binding. A receiver commonly administers claims and distributions while the company performs the compromise.
This page provides general information and is not legal advice on a particular matter. The facts, documents and timing may change the appropriate course.