Section 391 - Power to compromise or make arrangements with creditors and members.

Compromise and arrangement: tribunal-sanctioned agreements bind all relevant creditors and members after prescribed approval.

A company may propose a compromise or arrangement with creditors or members and the Tribunal can order meetings to consider it. If the required meeting majority approves and the Tribunal sanctions the proposal after being satisfied that all material facts have been disclosed, the arrangement binds all relevant creditors or members and the company (and, if winding up, the liquidator and contributories). The sanction takes effect only after filing a certified copy with the Registrar, and sanctioned orders must be annexed to subsequent copies of the memorandum or constitutive instrument, with fines for defaults; the Tribunal may stay proceedings while an application is pending.