(1)
Where a compromise or arrangement is proposed between a company and its creditors or any class of them, the Court may, on the application, in a summary way, of the company or any of its creditors or members or, in the case of a company being wound up, of the liquidator, order a meeting of the creditors or class of creditors, or of the members of the company, or class of members, as the case may be, to be summoned in such a manner as the Court directs.
(2)
If a majority representing at least three quarters in value of the shares of members or class of members, or of the interest of creditors or class of creditors, as the case may be, being present and voting either in person or by proxy at the meeting, agree to any compromise or arrangement, the compromise or arrangement may be referred by the Court to the Securities and Exchange Commission which shall appoint one or more inspectors to investigate the fairness of the compromise or arrangement and to make a written report on it to the Court within a time specified by the Court.
(3)
If the Court is satisfied as to the fairness of the compromise or arrangement, it shall sanction the same and the compromise or arrangement shall be binding on all the creditors or the class of creditors or on the members or the class of members as the case may be, and also the company or in the case of a company in the course of being wound up, on the liquidator and contributories of the company.
(4)
An order made under subsection (3) shall have no effect until a certified true copy of the order has been delivered by the company to the Commission for registration and a copy of every order shall be annexed to every copy of the memorandum of the company issued after the order has been made.
(5)
If a company defaults in complying with subsection (4), the company and each officer of the company is liable to a penalty as prescribed by the Commission in the regulations.
(6)
In this section and section 716 of this Act, “company” means any company liable to be wound up under this Act.