| (2) |
The board of a co-operative or the liquidator of a co-operative that is being wound up, may propose an arrangement or a compromise of its financial obligations to all its creditors or to all the members of any class of its creditors, by delivering a copy of the proposal and notice of the meeting to consider the proposal, to— |
| (a) |
every creditor of the co-operative or every member of the relevant class of creditors whose name or contact details are known to or can reasonably be obtained by the co-operative; and |
| (3) |
A proposal contemplated in subsection (2) must contain all the information reasonably required to enable the creditors to decide whether or not to accept or reject the proposal, and must be divided into the following three parts: |
| (a) |
Part A: Background, which must include at least— |
| (i) |
a complete list and valuation of all the material assets of the co-operative and an indication as to which assets are held as security by creditors as of the date of the proposal; |
| (ii) |
a complete list of the creditors of the co-operative and the amount of their claims as of the date of the proposal, an indication as to which creditors would qualify as secured, preferential or concurrent in terms of the laws of insolvency and an indication of which of the |
| (iii) |
the reasonably likely benefits, if any, that would be received by creditors, in their specific classes, if the co-operative were to be placed in liquidation; and |
| (iv) |
whether the proposal includes a proposal made informally by a creditor of the co-operative. |
| (b) |
Part B: Proposals, which must include at least— |
| (i) |
the nature and duration of any proposed debt moratorium; |
| (ii) |
the extent to which the co-operative is to be released from the payment of its debts; |
| (iii) |
the treatment of existing contracts and the ongoing activities of the co-operative; |
| (iv) |
the property of the co-operative that is proposed to be available to pay creditors’ claims; |
| (v) |
the order of preference in which the proceeds of property of the co-operative will be applied to pay creditors if the proposal is adopted; and |
| (vi) |
the benefits of adopting the proposal as compared to the benefits that would be received by creditors if the co-operative were to be placed in liquidation. |
| (c) |
Part C: Assumptions and conditions, which must include at least— |
| (i) |
a statement of the conditions that must be satisfied, if any, for the proposal to— |
| (aa) |
come into operation; and |
| (bb) |
be fully implemented; |
| (ii) |
the effect, if any, that the proposal contemplates on the number of employees and their terms and conditions of employment; and |
| (aa) |
balance sheet for the co-operative; and |
| (bb) |
statement of envisaged income and expenses for the ensuing three years, prepared on the assumption that the proposal is accepted. |
| (4) |
The projected balance sheet and statement contemplated in subsection (3)(c)(iii)— |
| (a) |
must include a notice of any significant assumptions on which the projections are based; and |
| (b) |
may include alternative projections based on varying assumptions and contingencies. |
| (5) |
A proposal must conclude with a certificate by an authorised director or the employee of the co-operative, stating that any— |
| (a) |
factual information provided appears to be accurate, complete and up to date; and |
| (b) |
projections provided are estimates made in good faith on the basis of factual information and assumptions as set out in the statement. |
| (6) |
A proposal contemplated in this section will be adopted by the creditors of the co-operative or the members of a relevant class of creditors, if it is supported by a majority in number, representing at least 75 per cent in value of the creditors or class, as the case may be, present and voting in person or voting by proxy, at a meeting called for that purpose. |
| (7) |
If a proposal is adopted as contemplated in subsection (6)— |
| (a) |
the co-operative may apply to the court for an order approving the proposal; and |
| (b) |
the court, on an application in terms of paragraph (a), may approve the compromise as set out in the adopted proposal if it considers it just and equitable to do so, having regard to— |
| (i) |
the number of creditors of any affected class of creditors who were present or represented at the meeting and who voted in favour of the proposal; and |
| (ii) |
in the case of a compromise in respect of a co-operative being wound up, the report as contemplated in Schedule 1A. |
| (8) |
A copy of an order of the court approving a compromise— |
| (a) |
must be filed with the registrar by the co-operative within five working days; |
| (b) |
must be attached to each copy of the co-operative’s constitution that is kept at its registered office; and |
| (c) |
is final and binding on all the co-operative’s creditors or all the members of the relevant class of creditors, as the case may be, as of the date on which it is filed. |
[Section 91BB inserted by section 66 of Notice No. 558, GG 36729, dated 5 August 2013]
General and Further Education and Training Quality Assurance Act
