Section 717 CAMA 2020
Section 717 Companies and Allied Matters Act is about Moratorium on creditors voluntary winding-up in a scheme of arrangement. It is under Chapter 27 (Arrangements and compromise) of the Act.
(1) No winding-up petition or enforcement action by a creditor(secured or unsecured) shall be entertained against any company or its assets that has commenced a process of arrangement and compromise with its creditors for six months from the time that the company by way of affidavit provides the following documents to the Court—
(a) a document setting out the terms intended to be proposed to the creditors in an arrangement or compromise ;
(b) a statement of the company’s affairs containing the particulars of the company’s creditors and its debts and other liabilities and of its assets;
(c) such other information as the Court may require ; and
(d) a statement that the company desires a protection from a winding-up process pending the completion of the arrangement or compromise.
(2) Notwithstanding the provisions of subsection (1), a secured creditors may, by application to the Court filed within 30 days of notice of the arrangement and compromise, discharge the six months moratorium period provided in subsection (1) if—
(a) the asset of the company sought to be enforced by the creditor does not form part of the company’s pool of assets to be considered under the arrangement and compromise proceeding ;
(b) the asset sought to be enforced by the creditor is a perishable goods or commodities which may depreciate or dissipate before expiration of the six months moratorium period ;
(c) the secured creditor enforces its security over the assets before receiving notice of the company’s proposed arrangement and compromise ; or
(d) the company consents in writing for a secured creditor to enforce its right over the company’s asset within the six months moratorium period :
Provided that the company, upon the approval or consent shall file a further affidavit updating the Court of the dissipation of the said asset.
