Significance: High Court holds that an order restraining further proceedings in any action or proceeding against a company may be granted under s 210(10) even if no application had yet been made under s 210(1) for a meeting of creditors or members, provided there was a proposal of a compromise or arrangement sufficiently detailed as to indicate that was something definitive that could be put to the creditors shortly, and the application was made bona fides.
what the Court needed to assess was whether on the face of the proposal the Court could conclude that there was a reasonable prospect of the scheme working and being acceptable to the general run of creditors, e.g. the proposal shows how greater benefit could potentially be derived by the creditors than if the company was to be wound up. So long as the court could make this broad brush assessment, sufficient particularity would have been given: -.
However, an application under s 210(1) should be made shortly after the restraint order is granted and if not, a sufficient explanation and proposed timelines should be given: .
In appropriate situations the Court may possibly take proactive measures for better case management and coordination, either under s 210(10) or any of the other possible orders under s 210(1) or s 210(3) read with s 210(4): .