KEEPING AFLOAT.

Taranaki Daily News, 19 October 1922, Page 4

KEEPING AFLOAT.

EMBARRASSED COMPANIES.

IMPORTANT PROPOSALS MADE. PROTECTING CREDITORS. (By Wire—Parliamentary Reporter.) Wellington, Last Night. The Companies Amendment Bill, which was introduced in the Honsc of Representatives to-day, is a very important measure. The Hon E P. Ute presented the Bill, and said that the necessity for it was a matter 'that the Prime Minister would take an opportunity of explaining to the House. Mr. Lee said that the purpose of the Bill was to protect the creditors of a company if the interests of the company were threatened by any particular creditor. The Bill provided that in such an event there should be a meeting of all the creditors, and if a certain majority of them decided upon a scheme for carrying on the company, then a Judge of the Supreme Court could order that in the general interests of the company there should be a stay of proceedings to allow the company to be carried on. Mr. Wilford: This is extraordinary. Mr. Lee said the provision had been in operation for a time in New South Wales. The Prime Minister would explain later why it was needed. It is understood by members of the House that the Bill has particular reference to certain large concerns in which farmers are interested. The Prime Minister indicated in a recent speech that there were two or three such concerns that would have to go into liquidation. There mayjie some other legislation dealing upon the subject before the session ends. The Bill was circulated later in the day. It is a measure of one operative clause. It provides that if it appears to the Court that any company is financially embarrassed, and that it would be contrary to the interests of the creditors of the company as a whole, or of any class of creditors, or contrary to the public interest, that the company should be wound up, the Court, on the application of the company or if any creditor or shareholder, or of its own motion, may direct a meeting to be held of the creditors of the company, or any class of creditors, for the purpose of considering the expediency of making some arrangement or compromise with the company. The i meeting is to be held as directed by the | Court, which may select a chairman, give directions as to procedure, and deI cide any other matter affecting the conI vening and conduct of the meeting.

I If any arrangement or compromise 7s I agreed to by a majority in the number representing three-fourths in the value of the creditors present in person or by proxy, the Court may order that such arrangement or compromise shall be binding upon the whole of the creditors of the company, or the whole of the class of creditors entitled to attend the meeting, and the arrangement or compromise shall take effect accordingly. An application to the Court to make use of these powers may be by petition, or if the proceedings have been commenced for the winding up of the company, by a motion in such proceedings.