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As enacted
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Part X · Compromises

271. Notice of proposed compromise

Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.

(1)

The proponent shall compile a list of creditors known to the proponent who would be entitled to attend each meeting that is to be convened under subsection (3) of section 270, setting out the amount or estimated amount of the company’s debt or liability to each creditor.

(2)

The proponent shall, in such manner as may be prescribed, give –

(a)

each known creditor of the company;

(b)

the company;

(c)

any receiver;

(d)

any administrator;

(e)

any liquidator; and

(f)

the Registrar, written notice, in accordance with the Fifth Schedule, of the intention to hold a meeting of the creditors or any class of creditors, or meetings of classes of creditors, for the purpose of voting on the resolution, at least twenty working days before the meeting or meetings, as the case may be.

(3)

The proponent shall enclose the following documents with a notice under subsection (2) –

(a)

a statement by the proponent –

(i)

containing the name and address of the proponent and the capacity in which the proponent is acting;

(ii)

containing the address and telephone number to which inquiries may be directed during normal working hours;

(iii)

setting out the terms of the proposed compromise and the reasons for it;

Rescue, Rehabilitation and Insolvency

(iv)

explaining the effect of approval of the proposed compromise, and in particular its commercial impact;

(v)

stating any material interests of a director or other officer of the company in the proposed compromise (whether as director or other officer or otherwise)

and the effect on those interests of the proposed compromise insofar as it differs from the effect on the like interests of other persons;

(vi)

explaining that the proposed compromise will be binding on all creditors or on all creditors of that class, if approved in accordance with section 272;

(vii)

containing details of the company’s alternatives if the proposed compromise is not approved;

(viii)

containing details of any procedure proposed as part of the proposed compromise for varying the compromise following its approval; and

(ix)

containing such other information as may be prescribed;

(b)

where a meeting of a class of creditors is not to be convened, on the ground that the members of that class do not have a genuine economic interest in the company, as referred to in paragraph (b) of subsection (4) of section 270, a statement by the proponent –

(i)

describing the relative ranking of the company’s debts or other liabilities to the

Rescue, Rehabilitation and Insolvency members of that class of creditors, with respect to the company’s debts or other liabilities to the members of each other class of creditors; and

(ii)

stating that the members of that class do not have a genuine economic interest in the company and that, accordingly, a meeting of that class is not to be convened; and

(c)

a copy of the list or lists of creditors referred to in subsection (1).

Read on from s 272

Part XI

Micro Small Medium Enterprise (MSME) Company Debt Restructuring Arrangements

Read on from Part XI

Part XII

Read on from Part XII

Part XIII

Read on from Part XIII

Part XIV

Cross - Border Insolvency

Read on from Part XIV

Part XV

Read on from Part XV

Part XVI

Read on from Part XVI

Part XVII

Read on from Part XVII

Schedules