JCW

[setting aside of restraining order and sanction for scheme of arrangement] Justin and Alvin acted for Proposed Interveners to apply to intervene and set aside ex-parte order granted by the Court to sanction a proposed scheme of arrangement and the restraining order. The Court allowed the Proposed Interveners’ application and inter-alia held that : (i) Grant of leave to intervene was warranted as the implementation of the scheme would directly and seriously affect the rights of the proposed interveners (ii) Court convened Creditors meeting held outside the 90 days period in the ex-parte order without any leave to extend time was a breach of the order. Also, some of the proposed interveners received their notice on filing of proof of debt late and were deprived of their statutory rights to vote (iii)No specific condition in the ex parte order or proposed rules of meeting or Section 366 of the companies act 2016 that the filing of proof of debt is required before the proposed interveners are recognized as class of creditors (iv) Application to sanction the scheme is an abuse of process bearing in mind that the settlement agreement upon which the proposed scheme is conditional, had been terminated and hopelessly insolvent and it would be against public policy. (v)On evidence, the white knight is not in a financial postion to implement the scheme. (vi)There was non disclosure of material facts including the inability of the white knight to rehabilitate the project All four requirements of Section 368(2)(a) to (d) of the Companies Act 2016 must be met even before the initial restraining order and there was non-compliance with these provisions.