Rescue, Rehabilitation and Insolvency (Corporate and Personal) Act 2026 · As enacted · Part XI · Micro Small Medium Enterprise (MSME) Company Debt Restructuring Arrangements
284. Creditor Approval of MSME Company Debt Restructuring Arrangement
Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.
Official translationFrom Department of Government Printing, unchanged
The personal insolvency proposer shall facilitate and chair the MSME Company Debt Restructuring
Arrangement negotiation meeting.
Subject to the provisions of this Part and any such rules, as may be prescribed, regarding the holding of a meeting referred to in this section the Fifth Schedule shall apply to the following matters :-
proxies;
chairperson;
quorum;
adjourned meetings; and
miscellaneous.
At the negotiation meeting, the creditors may-
conduct such examination of officers of the
MSME debtor as is reasonable to clarify the
MSME debtor’s financial circumstances;
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adjourn the meeting for a maximum period of ten working days to allow further investigation of the
MSME debtor’s affairs, by passing a resolution of a majority of creditors in value;
accept the proposal, by passing a resolution, in accordance with subsection (4), (5) or (6)
of section 282, that sets out the final terms of the MSME Company Debt Restructuring
Arrangement;
with the consent of the MSME debtor, modify or amend the proposal, by passing a resolution, in accordance with subsection (4), (5) or (6)
of section 282, that sets out the final terms of the MSME Company Debt Restructuring
Arrangement;
appoint the personal insolvency proposer as personal insolvency administrator of the MSME
Company Debt Restructuring Arrangement, or appoint another person, firm or body who is willing to act as personal insolvency administrator; and
with the consent of the MSME debtor, include such terms in the MSME Company Debt
Restructuring Arrangement with respect to the supervision of the affairs of the debtor as they may deem advisable.
Subject to subsections (5) and (6), a proposal shall be approved where the claims of those creditors voting in favour of the proposal represent a majority in value of two thirds of the claims of all creditors entitled to vote.
Where the proposal includes terms modifying or limiting the rights of secured creditors, in a manner specified in section 280 or otherwise, the proposal is approved where
Rescue, Rehabilitation and Insolvency the claims of those secured creditors voting in favour of the proposal represent more than two thirds of the value of the claims of secured creditors entitled to vote.
Where the proposal includes terms modifying or limiting the rights of creditors under hire-purchase agreements, finance leases or any similar agreement, in a manner specified in section 280 or otherwise, the proposal is approved where the claims of such creditors voting in favour of the proposal represent more than two thirds of the value of the claims of such creditors entitled to vote.
Where the proposal does not include terms modifying or limiting the rights of a secured creditor or hire-purchase agreement counterparty, such secured creditor or hire-purchase agreement counterparty may not vote on the proposal, the relevant creditor may not vote on the proposal:
Provided however that, if the debtor has made a declaration under section 47a of the Mortgage Act (Chapter 89), such secured creditor may participate as an unsecured creditor to the extent of the unsecured portion of the debt.
A creditor who does not
attend the negotiation meeting;
cast a postal vote; or
cast an electronic mail vote, shall be deemed to have voted in favour of the proposal for a
MSME Company Debt Restructuring Arrangement.
Where no creditor votes, the proposed Debt
Restructuring Arrangement shall be deemed to have been approved under this section.
For the avoidance of doubt, a creditor, having been given written notice in accordance with the provisions of this Part, who does not -
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submit a creditor’s claim form under section 283;
attend the negotiation meeting under this section;
cast a postal vote under this section; or
cast an electronic mail vote under this section, shall not be entitled to bring an application to object to a court order confirming the coming into effect of the Arrangement under section 288.
Where the creditors at a negotiation meeting does not accept the proposal –
the personal insolvency proposer shall endorse the proposal “not accepted by creditors” and return it to the Official Receiver; and
the MSME Company Debt Restructuring
Arrangement procedure shall terminate.
Part XII
Part XIII
Part XIV