A scheme of Arrangement is a compromise or arrangement between a company and its creditors under section 425 of the Companies Act 1985.
Schemes were originally used for insolvent insurers as a more flexible and cost effective way to close a company down the alternative being liquidation which can be expensive and lengthy. More recently Schemes have been used by solvent insurers who are looking to conclude all or part of their business.
A company interested in placing any of their business into a Scheme will require Court approval and the acceptance of the creditors by way of a vote, the majority needed to carry the vote would be 51% of the ballot representing 75% of the value.
Court approval is required at two stages the first is to give permission for the meeting of the creditors to take place (the leave to convene hearing), the second when the company asks the court to sanction the scheme once the required majorities have been achieved (the sanction hearing). A Scheme is not effective until the Court Order has been registered with the Registrar of Companies.
Once a Scheme becomes effective it is legally binding on the company and its creditors, the creditors are invited to submit their claims into the scheme, these claims are adjusted, agreed and paid under the terms of the Scheme. There are strict time limits concerning the submission of creditor claims, a final date for the submission will be communicated to the creditors this is known as the claims bar date, any creditor that does not submit their claim by the claims bar date will have no further interests in the Scheme.
Reliance National Insurance Company (Europe) Limited - (RNICE)
For an up-to-date position on the RNICE Scheme of Arrangement please refer to the current position PDF below. Documents relating to the Scheme of Arrangement can also be downloaded below.
Should you need to contact us in relation to the RNICE Scheme of Arrangement please e-mail: RNICE-scheme@whittingtoninsurance.com
