Scheme of Arrangement

A Scheme of Arrangement is a legal process used by a company facing financial difficulties to restructure its debts. It involves a proposed agreement between the company and its creditors to reorganize payment terms, which can include reducing amounts owed or extending payment periods. For the scheme to take effect, it must be approved by a specified majority of creditors and sanctioned by a court. This process helps the company avoid liquidation, allowing it to continue operating while repaying its debts more manageable. The aim is to ensure a fair outcome for both the company and its creditors.