MADAGASCAR Law and Practice Contributed by: Claudy Monja and Sarah Razafindrafito, John W Ffooks & Co
the cessation of payment, ordering the judicial reor - ganisation (if the debtor proposal is accepted by the court) and appointing the official receiver. The judg - ment will result in: • the assistance of the company’s current directors/ managers by a receiver in the administration, and disposal of the company’s assets; • the constitution of creditors into a single body, represented by the receiver; • the suspension and prohibition of any individual proceedings; • the suspension of registration of any securities; and • the production and verification of debts by the creditors. The judgment also suspends the accruing of legal and contractual interests and any interest on overdue payments. It should be noted that the composition proposal is subject to the approval of the court after its adoption by the debtor’s creditors. Where the court does not approve the composition proposal or if the composition is cancelled (due to failure by the debtor to comply with its commitments), the court will con - vert the judicial reorganisation into judicial liquidation. Liquidation (Liquidation des Biens) The purpose of the liquidation ( liquidation des biens ) procedure is to realise the debtor company’s assets in order to clear its debts. The judge orders the liquida - tion when it appears that the debtor has not made a serious proposal for reorganisation that would allow for its financial recovery and the clearing of its liabili - ties. When the judgment is pronounced, it results in the removal of the directors of the debtor’s company from the administration and disposal of the company’s assets, the declaration and verification of creditors’ claims, and the winding-up of the company and reali - sation of its assets or sale of its business for the pay - ment of claims. 2.9.3 Co-Ordination, Recognition or Relief in Connection With Overseas Proceedings Madagascar has been a party to a cross-border initia - tive (CBI) programme that comprises a policy frame - work between multiple countries throughout eastern and southern Africa and the Indian Ocean, providing
full support from their co-sponsor. It is similar to the concept adopted by states in the Indian Ocean and the cross-border programme set by the Indian Ocean Commission in 2014. Therefore, the CBI has been put in place to facilitate co-operation between states in the Indian Ocean such as Mayotte, Madagascar, the Comoros, Mauritius and the Seychelles. Nevertheless, there are no specific provisions that mandate cross- border co-operation preventing restricted parties from adopting co-ordination principles such as the Ameri - can Law Institute and International Insolvency Institute Guidelines Applicable to Court-to-Court Communi - cations in Cross-Border Cases 2001, and the INSOL International (International Association of Restructur - ing, Insolvency and Bankruptcy Professionals) Global Principles for Multi-Creditor Workouts 2000. 2.9.4 Effect of Lessee’s Insolvency on a Deregistration Power of Attorney Irrevocable powers of attorney regarding the assets which make up the estate of the insolvent party will not survive its insolvency. However, and taking into account that the aircraft is not owned by the lessee/ insolvent, the aircraft is not part of the insolvency estate, which is why the DPOA will survive. If the amounts regarding the lease are not paid, the lessor may invoke an event of default to terminate the agree - ment, requesting the repossession and deregistration of the aircraft through a DPOA. 2.9.5 Other Effects of a Lessee’s Insolvency In Madagascar, the declaration of the insolvency of a lessee does not suspend a lease agreement and the aircraft will not be deemed part of the lessee’s property. However, given that Madagascar has adhered to the Cape Town Convention and Protocol (see 2.10 Cape Town Convention and Others ), the following options must be considered when it comes to repossession of the aircraft. Madagascar has chosen alternative A of Article XI of the Cape Town Protocol. In other words, if the lessee is declared insolvent, the receiver(s) must give back the aircraft within a maximum waiting period of 60 cal - endar days unless the lessee executes the outstand - ing obligations and commits to execute all its future
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