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228: Compromise proposal
or “Suggesting a plan to help a struggling company pay its debts”
You could also call this:

“Telling people about a plan to make a deal with a company's creditors”

When someone wants to make a deal with the people a company owes money to, they need to do a few things. First, they need to make a list of all the people the company owes money to. This list should show how much money is owed to each person and how many votes each person gets when deciding if the deal is okay.

Next, the person suggesting the deal needs to tell everyone about it. They have to let all the people the company owes money to know about it, as well as the company itself and anyone who’s in charge of the company’s money. They also need to tell the Registrar, who keeps track of official business information.

The person suggesting the deal has to give everyone some important information. They need to say when and where there will be a meeting to vote on the deal. They also need to give their name and address, and say why they’re suggesting this deal. They have to explain what the deal is all about and what might happen if everyone agrees to it.

If any of the company’s directors are involved in the deal, that needs to be mentioned too. The person suggesting the deal also has to explain that if enough people agree to it, everyone will have to follow it, even if they didn’t vote for it. They should also say if there’s a way to change the deal after it’s been agreed to.

Finally, they need to give everyone a copy of the list of people the company owes money to. All of this information helps everyone understand the deal and decide if they think it’s a good idea.

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Next up: 230: Effect of compromise

or “How a compromise between a company and its creditors becomes binding”
Next

Part 14 Compromises with creditors

229Notice of proposed compromise

  1. The proponent must compile, in relation to each class of creditors of the company, a list of creditors known to the proponent who would be affected by the proposed compromise, setting out—

  2. the amount owing or estimated to be owing to each of them; and
    1. the number of votes which each of them is entitled to cast on a resolution approving the compromise.

      1. The proponent must give to each known creditor, the company, any receiver or liquidator, and deliver to the Registrar for registration,—

      2. notice in accordance with Schedule 5 of the intention to hold a meeting of creditors, or any 2 or more classes of creditors, for the purpose of voting on the resolution; and
        1. a statement—
          1. containing the name and address of the proponent and the capacity in which the proponent is acting; and
            1. containing the address and telephone number to which inquiries may be directed during normal business hours; and
              1. setting out the terms of the proposed compromise and the reasons for it; and
                1. setting out the reasonably foreseeable consequences for creditors of the company of the compromise being approved; and
                  1. setting out the extent of any interest of a director in the proposed compromise; and
                    1. explaining that the proposed compromise and any amendment to it proposed at a meeting of creditors or any classes of creditors will be binding on all creditors, or on all creditors of that class, if approved in accordance with section 230; and
                      1. containing details of any procedure proposed as part of the proposed compromise for varying the compromise following its approval; and
                      2. a copy of the list or lists of creditors referred to in subsection (1).