Companies Act 2014 section 540

Consideration by members and creditors of proposals

Section 540 sets out the rules governing how members and creditors consider and vote on an examiner's proposals for a compromise or scheme of arrangement to rescue a company under examinership.

• Proposals are accepted by creditors when a majority in number representing a majority in value of claims represented at the meeting vote in favour, but creditors whose claims will not be impaired by the proposals have no voting rights and are excluded from the majority calculation
• Any modifications to the examiner's proposals may only be accepted at the meeting with the examiner's consent, and an abstention or failure to vote cannot be treated as a vote against the proposals
• State authorities — including the State, government ministers, local authorities, and the Revenue Commissioners — may accept proposals even where their claims would be impaired, notwithstanding any other legislation
• Every meeting notice sent to a creditor or member must be accompanied by a statement explaining the effect of the proposed arrangement, including any material interests of the directors and how the arrangement affects those interests differently from others