BELIZE Law and Practice Contributed by: Tim Prudhoe, Nadia Chiesa and Lemelko Missick, Stanbrook Prudhoe
the business, provided creditor rights are not unfairly prejudiced. While the Act recognises arbitration of ancillary dis - putes (Schedule I, paragraph 6), statutory restructur - ing proceedings remain court-supervised. Simplified debt restructurings follow an expedited process, which is a 21-day creditor notice period (Section 287 (4)) followed by a 90-day moratorium, extendable once by 30 days (Section 296). 4.3 The End of the Restructuring, Rehabilitation and Reorganisation Procedure A statutory restructuring under the Act may conclude in several ways, depending on whether a compromise is approved or rejected, or the process lapses. Under Section 296 (1), a company is automatically discharged from the simplified debt restructuring programme after 90 days from the publication of its acceptance notice, unless extended once by up to 30 days (Section 296 (3)). The procedure also ends earlier if an application for court approval of a compromise under Section 293 (1) is granted, dismissed or with - drawn (Section 296 (5)). The High Court must approve any compromise or arrangement. It will not sanction a proposal unless satisfied that: • creditors have received adequate disclosure of material information; • statutory notice and objection procedures were followed; and • the proposal meets the “threshold requirement” – ie, at least two-thirds in value of creditors in each class support the plan (Section 293 (3)(d)). The Court may also reclassify creditors to ensure that the result is “fair and equitable” (Section 293 (5)), thereby applying a substantive fairness test before confirmation. The official receiver may discharge a company from the programme before expiry if: • eligibility criteria were not met at acceptance;
• false or misleading information was provided; • the debtor or its officers failed to co-operate with the restructuring advisor; • creditor support is insufficient to meet statutory thresholds; or • the company is otherwise unsuitable (Section 296 (7)). Failure by the debtor or creditors to observe an approved compromise constitutes a breach enforce - able by court application. The court may enforce, vary, or set aside the arrangement and may authorise fur - ther insolvency proceedings if default persists. The Act clearly defines the consequences for a debtor’s position and role upon initiating a statu - tory restructuring or insolvency procedure, primarily through the provisions governing Creditors’ Arrange - ments (Part II) and Administration (Part III). Following an administration order, the debtor com - pany may continue to operate, but its management authority is transferred. Section 92 (1) specifies that the administrator acts as the agent of the company, and Schedule I, paragraph 12 grants the administra - tor the explicit power to carry on the business. Con - sequently, the administrator assumes control of all operations, and the directors’ powers are suspended to the extent required to meet the administration’s objectives. 4.4 The Position of the Debtor in Restructuring, Rehabilitation and Reorganisation Upon commencement of administration, the debtor immediately loses control over its assets. Section 80 states that an administration order suspends any resolution for winding up and transfers control of the company to the administrator. Furthermore, Section 84 (1) strictly prohibits any person from taking pos - session of or exercising control over any company asset without the administrator’s consent or the leave of the High Court. The administrator is also authorised under Section 85 (1) to dispose of perishable assets during the moratorium and is generally empowered (Schedule I, paragraph 2) to sell, charge or otherwise dispose of assets. The debtor’s use of its assets is
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