Sterling Ford - Insolvency & Bankruptcy Services

   Section 110 - Restructuring/Reorganisation
Section 110 Insolvency Act 1986 Arrangements: Restructuring or Reorganisation
Under these arrangements or schemes of reconstruction the whole or part of the business of a company in liquidation is transferred by the liquidator to one or more other companies (or limited liability partnerships) and the members of the first company accept as consideration shares or other securities in the purchasing company (or membership in the transferee limited liability partnership) instead of receiving a cash distribution. The winding up of the first company can be by a members' voluntary liquidation if it is solvent, which would require a special resolution of the company in order to sanction the proposed arrangements. If the company is insolvent it would have to be wound up by a creditors' voluntary liquidation and sanction for any proposed arrangements would have to be obtained from the court or liquidation committee, or if no committee, from a meeting of creditors.
These arrangements or schemes of reconstruction are particularly attractive in cases where the owners or management of a company wish to divide the business assets or activities between them so that they can be developed, for example, as separate businesses. This procedure also helps to resolve disputes between owners of companies allowing them to split their business by assets or trades and go their own separate ways.

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