Recent developments in South African company law in respect of offers of compromise and schemes of arrangement between a company and its creditors and/or members in terms of section 311 of the Companies Act no. 61 of 1973, as amended

Getz, Keith

Recent developments in South African company law in respect of offers of compromise and schemes of arrangement between a company and its creditors and/or members in terms of section 311 of the Companies Act no. 61 of 1973, as amended

Thesis / Dissertation

1995

Abstract

A company may wish to negotiate, or indeed be forced to negotiate, with its members and/or creditors with a view to modifying rights or claims in their common interest. Such rights or claims against a company often vest in a large number of members or creditors with whom it would be impossible for a company to negotiate individually. Section 311 of the Companies Act No. 61 of 1973, as amended ("the Act"), in providing for a compromise or arrangement between a company and its members and/or creditors (or a class of them), provides a statutory procedure, subject to supervision by the courts, whereby a company can negotiate with its members and/or creditors (or a class of them) collectively and bind such members or creditors to proposals agreed upon by a majority of such members or creditors. Section 311 makes provision for the reaching of binding ,agreement between a company and its members and/or creditors in a manner which modifies rights upon a majority vote subject to certain safeguards of the rights of dissenting minorities.

Keywords

Law

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