§ Avoidance of Deeds of Arrangement unless assented to by a Majority of the Creditors.
§ 25.—(1) A deed of arrangement shall be void unless before or within fourteen days after the registration thereof, or within such extended time as the High Court may allow, it has received the assent of a majority in number and value of the; creditors of the debtor.
§ (2) The list of creditors annexed to the affidavit of the debtor filed on the registration of the deed of arrangement shall be prima facie evidence of the names of the creditors and the amounts of their claims.
1018§ (3) The assent of a creditor shall be established by his executing a deed of arrangement or sending to the trustee his assent in writing attested by a witness, but not otherwise.
§ (4) The trustee shall file with the Registrar of Bills of Sale at the time of the registration of a deed of arrangement, or, in the case of a deed of arrangement assented to after registration, within twenty-one days after registration or within such extended time as the High Court may allow, a statutory declaration by the trustee that the requisite majority of the creditors of the debtor have assented to the deed of arrangement, which declaration shall be prima facie evidence of the fact declared.
§ LORD HOLLENDENI move, in subsection (1), to leave out "fourteen days" and to insert "one calendar month." Fourteen days is hardly sufficient to get together a body of creditors, some of whom may be foreign creditors, and give them time to consider the question. We ask, therefore, that the period should be altered to one calendar month.
§ Amendment moved—
§ Page 13, line 4, leave out ("fourteen days") and insert ("one calendar month").—(Lord Hollenden.)
§ THE EARL OF GRANARDThere is a certain danger in this Amendment, because it would give a great opportunity to an unscrupulous trustee to dissipate the estate. The period in the subsection is fourteen days, but I am prepared to meet the noble Lord by making the period twenty-one days. That would virtually give twenty-eight days in all from the date of execution.
§ LORD HOLLENDENI accept the twenty-one days.
§ On Question, Amendment, as amended, agreed to.
§ LORD HOLLENDENI move, after "High Court" in subsection (1), to insert "or the Court having jurisdiction in bankruptcy in the district in which the debtor resided or carried on business at the date of the execution of the deed." The object of this Amendment is to prevent the necessity of bringing the debtor up to London, and to save expense by enabling the matter to be adjudicated upon in the district in which the debtor resided or carried on his trade.
§ Amendment moved—
§ Page 13, line 5, after (" High Court ") insert (" or the Court having jurisdiction in bankruptcy in the district in which the debtor resided or carried on business at the date of the execution of the deed ").—(Lord Hollenden.)
§ THE EARL OF GRANARDAs far as the Board of Trade are concerned they have no objection to this Amendment, and I understand that the Lord Chancellor offers no objection to it. In these circumstances I have pleasure in accepting it.
§ On Question, Amendment agreed to.
§ LORD HOLLENDENI move to insert the word "unsecured" before the words "creditors of the debtor" at the end of subsection (1). It is intended that the unsecured, creditors should consider this question, and I ask the noble Earl in charge of the Bill to allow the word "unsecured" to be here inserted.
§ Amendment moved—
§ Page 13, line 6, after ("value of the") insert ("unsecured").— (Lord Hollenden).
§ THE EARL OF GRANARDI suggest that the noble Lord should withdraw this Amendment, as the proposed new subsection standing in my name later on the Paper covers the point. That subsection is to the effect that in calculating a majority of creditors for the purposes of this and the next following section secured creditors shall be disregarded.
§ LORD HOLLENDENI withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ LORD HOLLENDENI move to substitute "six weeks" for "twenty-one days" in subsection (4).
§ Amendment moved—
§ Page 13, line 18, leave out ("twenty-one days") And insert ("six weeks").—(Lord Hollenden.)
§ THE EARL OF GRANARDThe period of six weeks seems an unnecessarily extended period, and if the noble Lord will substitute "twenty-eight days" I shall be prepared to meet him to that extent.
§ LORD HOLLENDENI accept that.
§ On question, Amendment, as amended, agreed to.
§ LORD HOLLENDENThe next Amendment follows a previous one, and I hope the noble Earl will accept it.
§ Amendment moved—
§ Page 13, line 19, after ("High Court") insert ("or the Court having jurisdiction in bankruptcy in the district in which the debtor resided or carried on business at the date of the execution of the deed").—(Lord Hollenden.)
§ THE EARL OF GRANARDI accept the Amendment.
§ On Question, Amendment agreed to.
§ THE EARL OF GRANARDI now come to the new subsection to which I referred a moment ago. The word "creditors" in Clause 25, subsection (1), was intended only to refer to unsecured creditors, but as the phraseology is somewhat vague it is thought better to expressly insert the words which appear in the early part of the new subsection which I now move. As regards the other part of the proposed new subsection, various representations have been made to the Board of Trade in regard to difficulties and delays that arose in obtaining the consent of a majority of creditors where there were numerous creditors of small amount. To meet these difficulties it is proposed that creditors for less than £10 may be left out of account.
§ Amendment moved—
§
Page 13, line 22, after ("declared") insert as a new subsection: —
(5) " In calculating a majority of creditors for the purposes of this and the next following section, secured creditors shall be disregarded, and creditors whose debts amount to sums not exceeding ten pounds shall be reckoned in the majority in value but not in the majority in number."—(The Earl of Granard.)
§ On Question, Amendment agreed to.
§ Clause 25, as amended, agreed to.
§ Clauses 26 and 27 agreed to.
1021§ Clause 28:
§ Effect of notice to Creditors of Deed of Arrangement.
§ 28. If the trustee under a deed of arrangement serves in the prescribed manner on any creditor of the debtor notice in writing of the execution of the deed and of the filing of the certificate of creditors' assents, with an intimation that the creditor will not after the expiration of one month from the service of the notice be entitled to present a bankruptcy petition against the debtor founded on the execution of the deed, or on any other act committed by him in the course or for the purpose of the proceedings preliminary to the execution of the deed, as an act of bankruptcy, that creditor shall not after the expiration of that period be entitled to present a bankruptcy petition against the debtor founded on the execution of the deed, or on any act so committed by him, as an act of bankruptcy.
§ THE EARL OF GRANARDI move the insertion of a new subsection to provide that where a deed of arrangement has become void by virtue of the Deeds of Arrangement Act, 1887, or this Act, the fact that a creditor has assented to the deed shall not disentitle him to present a bankruptcy petition founded on the execution of the deed of arrangement as an act of bankruptcy. It has been pointed out to the Board of Trade by certain trade organisations that in the absence of an express provision of this nature the debtor might regain possession of his assets, which he might proceed to dissipate. It is desirable that the estate should at the earliest moment come under the jurisdiction of the bankruptcy Judge for the benefit of the creditors, and with that object I move this Amendment.
§ Amendment moved—
§
Page 14, line 41, after ("bankruptcy'') insert as a new subsection:
(2) Where a deed of arrangement has become void by virtue of the Deeds of Arrangement Act, 1887, or this Act, the fact that a creditor has assented to the deed shall not disentitle him to present a bankruptcy petition founded on the execution of the deed of arrangement as an act of bankruptcy."—(The Earl of Granard.)
§ On Question, Amendment agreed to.
§ Clause 28, as amended, agreed to.
§ Remaining Clauses agreed to.
§ Schedule:
§ Drafting Amendments agreed to.
§ Schedule, as amended, agreed to.
§ The Report of Amendments to be received on Tuesday the 11th of Jane next, and Bill to be printed as amended. (No. 52.)