Practice direction – scheme of arrangements with creditors

This practice statement replaces the Practice Note issued by Eve J and reported at 1934 WN 142. It is directed to the practice to be followed on applications pursuant to s425 of the Companies Act 1985 seeking the sanction of the court to a scheme of arrangement between a company and its creditors. A change in practice is required to avoid, if possible, the waste of costs and court time illustrated in Re Hawk Insurance [2001] 2 BSCLC 480, the purpose of which is to enable issues concerning the composition of classes of creditors and the summoning of meetings to be identified and if appropriate resolved early in the proceedings. To achieve these objects the following practice should be observed.