At the convening hearing, the court held:
- It had to be satisfied that the company had taken all reasonable steps to identify and notify creditors but that, having regard to the nature of the business, its record keeping and what it was practical for the company to do, in the circumstances the company had taken all reasonable steps to notify creditors with contingent claims in respect of commission or misselling with whom the company had had no contact for five years particularly in view of the fact that these creditors had low value claims and were substantially out of the money.
- The company had initially proposed that the contingent debts should be compromised for a nominal £1 and there was an issue as to whether such a surrender or expropriation amounted to a compromise or arrangement capable of being sanctioned by the court under the restructuring plan mechanism in Part 26A. The court stated however that it had not been necessary to decide this issue because the company had revised its proposal to provide for a fund out of which contingent creditors would receive 2p in the £.
The court held that it was appropriate for creditor meetings to be convened to vote on the scheme.
In re Great Annual Savings Co Ltd, convening judgment, 17 February 2023