Companies Act 2014 section 1142

Protection of creditors

Section 1142 sets out the rights of creditors to object to a merger where their debts or claims may be put at risk, and the powers of the court to manage those objections and protect creditors' interests.

• A creditor who can credibly demonstrate that a proposed merger is likely to jeopardise the repayment of a debt or claim may object to the court's confirmation of the merger
• The court may draw up a formal list of creditors entitled to object, specifying the nature and amount of each debt or claim, and set deadlines for unlisted creditors to apply for inclusion
• Where a listed creditor does not consent to the merger, the court may override that objection provided the merging company or the successor company secures payment of the debt or claim
• The court has discretion to exempt any class of creditors from these protective procedures if special circumstances warrant it