Scheme of arrangement
A scheme of arrangement is terminated by the company performing
its obligations thereunder in accordance with its terms and continuing
to trade; or by the company breaching the same. In the latter
case, a judicial management or liquidation will almost inevitably
follow.
Receivership
A receivership terminates by act of the receiver upon the conclusion
of the realisation of the charged property and the payment of
the sums realised to the debenture holder after deducting the
costs of the receivership. The surplus if any is handed back to
the company, or if the company is in liquidation, to the liquidator.
Liquidation
A liquidation terminates when the liquidator has realised all
the property of the company or so much thereof as can be realised
without needlessly protracting the liquidation and has distributed
a final dividend to the creditors, and adjusted the rights of
the contributories among themselves. The liquidator then applies
to court for an order releasing him and dissolving the company.
A winding up order can also be terminated by a permanent stay.
This is rarely granted as the court is of the view that insolvent
companies should be wound up. An instance where it might be granted
is where the winding up order ought not to have been granted in
the first place. In such a case, a permanent stay is the only
option as the court does not have power to set aside a windnig
up order.
udicial management
Unless extended by the court, a judicial management order is
discharged after 180 days. A judicial management order may be
discharged earlier if the creditors decline to approve the judicial
manager's proposals, or if the court so orders by reason of the
judicial manager acting in a manner unfairly prejudicial to the
creditors or members, or if it appears on the application of the
judicial manager that the purposes of the judicial management
order cannot be achieved. When the order is discharged, the judicial
manager automatically vacates office.
