Compromises And Schemes Of Arrangement

The recent economic difficulties have given wider prominence to the uses and importance of compromises and schemes of arrangement, for both solvent and insolvent companies and groups. They may be used in a wide variety of circumstances including reconstructions, reorganisations and demergers as well as for mergers and acquisitions, redomiciliations and return of capital to members. They may be used on a stand-alone basis or in conjunction with other procedures such as reduction of share capital and may provide useful alternatives to administration and other insolvency procedures, often with a cross border element. The latter was demonstrated by the Drax Power cases where schemes in Jersey, Cayman and England were used to restructure well over a billion pounds worth of debt and were contemporaneously sanctioned in those jurisdictions.