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COMPROMISE

Between creditors and debtors 

COMPROMISE 

Between creditors and debtors 

COMPROMISE DEFINITION

Compromise in terms of Section 155 of the New Companies Act, a compromise can be reached with creditors to the effect that creditors write off a percentage of the amounts owing to them or grant an extension for repayment.

COMPROMISE DEFINITION

Compromise in terms of Section 155 of the New Companies Act, a compromise can be reached with creditors to the effect that creditors write off a percentage of the amounts owing to them or grant an extension for repayment.

COURT ORDER

After a compromise has been reached, the compromise is made an order of the court and the funds are distributed according to the compromise reached

COURT ORDER

After a compromise has been reached, the compromise is made an order of the court and the funds are distributed according to the compromise reached

EFFECT OF COMPROMISE

The effect of such a compromise is that there is a moratorium reached with creditors whereby all creditors are bound by the decision of a minimum of 75% of creditors.

EFFECT OF COMPROMISE

The effect of such a compromise is that there is a moratorium reached with creditors whereby all creditors are bound by the decision of a minimum of 75% of creditors.

COMPROMISE AFTER LIQUIDATION

A compromise reached after a company has been placed in liquidation has the effect that the company is taken out of liquidation by order of court should last-mentioned be specifically agreed upon as part of the compromise. The company in liquidation can immediately after the compromise is agreed upon, approach court for such an order.

COMPROMISE AFTER LIQUIDATION

A compromise reached after a company has been placed in liquidation has the effect that the company is taken out of liquidation by order of court should last-mentioned be specifically agreed upon as part of the compromise. The company in liquidation can immediately after the compromise is agreed upon, approach court for such an order.

Process Flow

It is important that all creditors at all times be notified of the development and practical arrangements regarding the negotiation.