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555.   Composition, etc.

Revised Laws of Saint Lucia (2021)

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CHAPTER 5
COMPOSITION OR SCHEME OF ARRANGEMENT

555.   Composition, etc.

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    (1)   Where a debtor intends to make a proposal for a composition in satisfaction of his or her debts, or a proposal for a scheme of arrangement of his or her affairs, he or she shall within 4 days of submitting his or her statement of affairs, or within such time thereafter as the receiver may fix, lodge with the receiver a proposal in writing signed by him or her, embodying the terms of the composition or scheme of arrangement which he or she is desirous of submitting for the consideration of his or her creditors, and setting out particulars of any sureties or securities proposed.

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    (2)   In such case the receiver shall hold a meeting of creditors, before the public examination of the debtor is concluded, and send to each creditor before the meeting a copy of the debtor's proposal with a report thereon; and if at that meeting or the adjournment thereof as hereinafter provided, a majority in number and ¾ in value of all the creditors who have proved resolve to accept the proposal, the same shall be deemed to be duly accepted by the creditors, and when approved by the Court shall be binding on all the creditors.

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    (3)   The debtor may at the meeting or the adjournment thereof amend the terms of his or her proposal if the amendment is in the opinion of the receiver calculated to benefit the general body of creditors.

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    (4)   Any creditor who has proved his or her debt may assent to or dissent from the proposal by a letter in the prescribed form, addressed to the receiver so as to be received by him or her not later than the day preceding the meeting or adjourned meeting, and any such assent or dissent shall have effect as if the creditor had been present and had voted.

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    (5)   The debtor or receiver may, after the proposal is accepted by the creditors, apply to the Court to approve it, and notice of the time appointed for hearing the application shall be given to each creditor who has proved.

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    (6)   The application shall not be heard until after the conclusion of the public examination of the debtor. Any creditor who has proved may be heard by the Court in opposition to the application, notwithstanding that he or she may at a meeting of creditors have voted for the acceptance of the proposal.

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    (7)   The Court shall, before approving the proposal, hear a report of the receiver as to the terms thereof, and as to the conduct of the debtor, and any objections which may be made by or on behalf of any creditor.

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    (8)   If the Court is of opinion that the terms of the proposal are not reasonable, or are not calculated to benefit the general body of creditors, or in any case in which the Court is required, where the debtor is adjudged bankrupt, to refuse his or her discharge, the Court shall refuse to approve the proposal.

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    (9)   If any facts are proved on proof of which the Court would be required either to refuse, suspend, or attach conditions to the debtor's discharge were he or she adjudged bankrupt, the Court shall refuse to approve the proposal, unless it provides reasonable security for payment of not less than 24¢ in the dollar on all unsecured debts provable against the debtor's estate.

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    (10)   In any other case the Court may either approve or refuse to approve the proposal.

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    (11)   If the Court approves the proposal, the approval may be testified by the seal of the Court being attached to the instrument containing the terms of the proposed composition or scheme, or by the terms being embodied in an order of the Court.

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    (12)   A composition or scheme accepted and approved in pursuance of this article shall be binding on all the creditors so far as relates to any debts due to them from the debtor and provable in bankruptcy, but shall not release the debtor from any liability under a judgment against him or her in an action for seduction, or under an affiliation order, except to such extent and under such conditions as the Court expressly orders in respect of such liability.

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    (13)   A certificate of the receiver that a composition or scheme has been duly accepted and approved shall, in the absence of fraud, be conclusive as to its validity.

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    (14)   The provisions of a composition or scheme under this article may be enforced by the Court on the application of any person interested, and any disobedience of an order of the Court made on the application shall be deemed a contempt of Court.

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    (15)   If default is made in payment of any instalment due in pursuance of the composition or scheme, or if it appears to the Court, on satisfactory evidence, that the composition or scheme cannot, in consequence of legal difficulties, or for any sufficient cause, proceed without injustice or undue delay to the creditors or the debtor, or that the approval of the Court was obtained by fraud, the Court may, if it thinks fit, on application by the receiver or the trustee or by any creditor, adjudge the debtor bankrupt, and annul the composition or scheme, but without prejudice to the validity of any sale, disposition or payment duly made, or thing duly done, under or in pursuance of the composition or scheme. When a debtor is adjudged a bankrupt hereunder, any debt provable in other respects, which has been contracted before the adjudication, shall be provable in the bankruptcy.

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    (16)   No composition or scheme shall be approved by the Court which does not provide for the payment in priority to other debts of all debts directed to be so paid in the distribution of the property of a bankrupt.

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    (17)   The acceptance by a creditor of a composition or scheme shall not release any person who would not be released by an order of discharge if the debtor had been adjudged a bankrupt.

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