Insolvency “Company law” Janet Dine IA 1986 revised and updated the law in this area, introducing two new procedures with a view to encouraging corporate rescues. Voluntary arrangements  scheme for making arrangements with creditors which will be legally binding on all creditors, even if not all of them agree. Where a company wants to avoid liquidation, those plans cannot be upset by a single creditor insisting on liquidation. Disadvantage under IA 1986- the scheme may not be approved for some weeks  IA 2004 is being considered, which would introduce a moratorium on creditors when a company’s voluntary arrangements were being considered. Proposal The first step towards approval of an arrangement is a proposal to the company + creditors. Proposal is made by the directors unless the company is in administration or liquidation, when it is made by an administrator of liquidator (s 1 IA 1986). A receiver or a voluntary receiver is not empowered to propose a voluntary arrangement. The arrangement must be supervised by a qualified insolvency practitioner. The most likely proposals will be the acceptance by each creditor of a percentage of their claim, or a moratorium on enforcement of claims for a certain period. The involvement of the court If the supervisor is someone other than the liquidator, or admin, he must report to the court within 28 days as to whether the proposal should be considered (s 2(2) IA 1986). Contents of the proposal The company’s assets must be set out in detail, as the proposed arrangement itself. Meetings Meetings of the company members + creditors must be summoned. For the members’ meeting the requisite majority for any resolution is more than ½ of the members present in person or by proxy (I Rules 1 2.20.(1)). As far as the creditors’ meeting is concerned, there are two requisite majorities- 75%+ (for resolution to pass any proposal or any modification of the proposal) and 50%+ (other resolutions). Challenges An arrangement can be challenged on