541. (1) The report of the examiner under section 534 shall be set down for consideration by the court as soon as may be after receipt of the report by the court.

(2) The following persons may appear and be heard at a hearing under subsection (1):

(a) the company concerned;

(b) the examiner;

(c) any creditor or member whose claim or interest would be impaired if the proposals were implemented;

(d) the directors of the company;

(e) if the company concerned is a company referred to in section 510(2), (3) or (4) — the Central Bank.

(3) At a hearing under subsection (1), the court may, as it thinks proper, subject to the provisions of this section and sections 542 and 543—

(a) confirm,

(b) confirm subject to modifications, or

(c) refuse to confirm,

the proposals for the compromise or arrangement concerned (referred to subsequently in this section as “proposals”).

F306[(3A) Where the court confirms proposals under subsection (3) (with or without modification), the conditions of such confirmation shall be clearly specified by the court and shall confirm at least the following:

(a) a majority in number of creditors whose interests or claims would be impaired by implementation of the proposals, representing a majority in value of the claims that would be impaired by implementation of the proposals, have accepted the proposals in accordance with section 540;

(b) the exercise of voting rights has been carried out in accordance with section 540;

(c) creditors with sufficient commonality of interest in the same class have been treated equally, and in a manner proportionate to their claim;

(d) notice of the proposals has been given to all members and creditors whose interests or claims will be impaired by the proposals in accordance with subsection 540(11);

(e) where there are dissenting creditors, that the proposals satisfy the best-interest-of-creditors test;

(f) where applicable, that any new financing is necessary to implement the proposals and does not unfairly prejudice the interests of creditors.

(3B) Where any proposals have not been accepted in accordance with section 540, the court may, upon the application of the examiner or with the examiner’s agreement, confirm the proposals under subsection (3) (with or without modification) if –

(a) the proposals have been accepted by –

(i) a majority of the voting classes of creditors whose interests or claims would be impaired by the proposals, provided that at least one of those classes is a class of secured creditors, or is senior to the class of ordinary unsecured creditors, or

(ii) where the classes of creditors specified in subparagraph (i) have not accepted the proposals, at least one voting class of creditors whose interests or claims would be impaired by the proposals other than a class of creditors which, upon a valuation of the company as a going concern, would not receive any payment or keep any interest, or which could be reasonably presumed not to receive any payment or keep any interest, if the normal ranking of liquidation priorities under sections 621 and 622 were applied,

and

(b) the court is satisfied that –

(i) the conditions specified in paragraphs (b) to (f) of subsection (3A) have been met, and

(ii) no class of creditors whose interests or claims will be impaired by the proposals can, under the scheme of arrangement, receive or keep more than the full amount of its interests or claims.]

(4) The court shall not confirm any proposals unless—

(a) at least one class of creditors whose interests or claims would be impaired by implementation of the proposals has accepted the proposals, and

F307[(b) the court is satisfied that –

(i) the conditions specified in subsection (3A) or (3B) have been met,

(ii) the proposals are fair and equitable in relation to any class of members or creditors that has not accepted the proposals and whose interests or claims would be impaired by implementation, and

(iii) the proposals are not unfairly prejudicial to the interests of any interested party,

and in any case shall not confirm any proposals if the sole or primary purpose of them is the avoidance of payment of tax due.]

F306[(4A) The court shall refuse to confirm any proposals where the proposals would not have a reasonable prospect of facilitating the survival of the company, or the whole or part of its undertaking as a going concern.]

F307[(5) Without prejudice to subsections (3B), (4) and (4A), the court shall not confirm any proposals in respect of a company to which an examiner has been appointed under section 517 if –

(a) the proposals would have the effect of impairing the interests of the creditors of the company in such a manner as to unfairly favour the interests of the creditors or members of any company to which it is related, being a company to which that examiner has been appointed under section 509 or, as the case may be, section 517, or

(b) the court is satisfied that the proposals do not satisfy the best-interests-of-creditors test where such proposals are challenged by one or more creditors on the basis that they do not satisfy the best-interests-of-creditors test.]

F307[(6) Where the court confirms proposals (with or without modification), the proposals shall be binding on –

(a) all the members or class or classes of members, as the case may be, impaired by the proposals, unless the member or class or classes of members, as the case may be, was not given notice of a meeting they would have been entitled to attend under section 534, and

(b) the company.]

F307[(7) Where the court confirms the proposals (with or without modification), the proposals shall, notwithstanding any other enactment, be binding on –

(a) all the creditors or the class or classes of creditors, as the case may be, impaired by the proposals in respect of any claim or claims against the company, unless the creditor or class or classes of creditors, as the case may be, was not given notice of a meeting they would have been entitled to attend under section 534, and

(b) any person other than the company who, under any enactment, rule of law or otherwise, is liable for all or any part of the debts of the company.]