AND WHEREAS the said R. has agreed to find the sum of 36,0007. for Form 25. the working capital of the company and to lend the same to the company so as to become the A. debenture debt of the company, but upon the condition that the separate creditors of the said A. shall take the joint acceptances, drafts, or notes of the said R. & F., in full discharge of their claims, and that the assets of the said F. shall be handed over to him as hereinafter expressed, and that the proofs against the separate estate shall not exceed the sum of 24,0007., and that the liquidation of the said separate estate be closed on or before 10 Jan. 1876.

AND WHEREAS it is also a condition of the arrangements hereinafter expressed that the proof against the separate estate of the said H. shall not exceed 2007., and that the liquidation of the said separate estate be closed on or before 10 Jan. 1876.

AND WHEREAS the said F., H., & R., have subscribed or caused to be subscribed the memorandum and articles of association of the company, to the intent and on the terms that under the powers in the said articles of the company should issue fully paid-up shares to represent moneys paid in respect of the principal of mortgages and debentures, and which would otherwise have been available for dividends, and should execute the agreement hereinafter expressed in that behalf.

AND WHEREAS the said scheme of settlement, the terms whereof are herein expressed, has been sanctioned by special resolutions of the creditors in the said matter of the said liquidation, and has been duly approved by the court in pursuance of the twenty-eighth section of the Bankruptcy Act, 1869.

NOW IT IS HEREBY AGREED as follows:

1. The said T., as such trustee as aforesaid, shall make over and assure Sale of land. to the company all the freehold and leasehold hereditaments in mortgage as aforesaid, and forming joint assets in the said matter in consideration of the obligation of the company to pay off the said mortgages and shall make over and assure to the company all the freehold and leasehold hereditaments not in mortgage as aforesaid, forming such joint assets in consideration of the obligation of the company to pay off the said lien for unpaid purchase-money, and of 9,0007. to be covered and represented by B. debentures of the company to be issued as hereinafter mentioned, subject, as to the premises affected thereby, to the annuities, mortgages, and lien hereinbefore mentioned, and on the terms hereinafter expressed.

assets.

2. The said T., as such trustee as aforesaid, shall make over, transfer, Sale of other and assure to the company all other the assets as existing at the date hereof in the matter of the said liquidation (other than the separate assets of the said F., and such separate assets of the said H. as may be required for the payment of his separate creditors, and the assets specified in the second schedule hereunder written), in consideration of the remainder of the B. debentures to be issued as hereinafter mentioned, and on the terms hereinafter expressed.

3. The company shall enforce and effectuate the said arrangements Company to

Form 25. for modifying and altering the said mortgagees' interest, so as to conform with the terms of the articles of association with respect to the A. first mortgage debt, and the P. first mortgage debt as therein defined respectively.

arrange with mortgagees.

Loan by R.

Joint creditors to have B. debentures.

Issue of paidup shares as mortgages paid off.

As to separate estate of A.

As to separate estate of B.

Application of excepted property.

4. The said R. shall lend, and the company shall borrow the said sum of 36,0007., so as to form the A. debenture debt of the company.

6. The company shall issue to each of the joint creditors in the said matter (other than the said mortgagees, but including the trustees of M. as creditors for 10,6677. part only of their claim), B. debentures of the company representing the B. debenture debt, according to the terms of the articles of association and the schedule thereto, for the amount for which each creditor has proved or shall prove in the matter of the said liquidation, but not including any interest after 5 June, 1875.

6. As and when the company shall pay off any part of the principal of the A. first mortgage debt, the P. first mortgage debt, and the B. debenture debt (representing together the purchase-money for the said property) out of profits which, but for the special stipulations for the application of such profits to the payments aforesaid would have been available for dividends, the company shall (subject to the provisions of the articles) issue to the members of the company, in proportion to their shares, fully paid-up shares of the company to the extent of the amount so paid off.

7. The said T., as such trustee as aforesaid, shall hand over the separate estate of the said F. to him in exchange for the joint acceptances, drafts, or notes of the said R. and F. for the amount of the proofs of the creditors respectively against such separate estate, payable not later than the 1st Mar. 1876; and the said R. and F., at their own expense, shall give such acceptances, drafts, or notes accordingly, and the separate creditors shall accept the same in full discharge of their claims.

8. The said T., as such trustee as aforesaid, shall hand over the surplus (if any) of the separate assets of the said H., after payment of the separate creditors of the said H. to the company, to be paid by them to the holders of the P. first mortgage debt, as part of the first instalment of 12,7507. mentioned in the schedules to the said Articles as payable in respect thereof, and the said surplus (if any) shall be deemed for that purpose to be profits of the company.

9. The said T., as such trustee as aforesaid, shall stand possessed of the property specified in the second schedule hereunder written, in trust in the first place to pay to the trustees of M. the sum of 20,0007., the balance of their said claim on or before 31 Dec. 1875; and in the next place, to pay all the expenses of the proceedings in the said liquidation, and all expenses of carrying into effect the scheme of settlement hereby agreed on, including the costs incurred since 27 May, 1875, by the mortgagees under the first mortgage of the A. Works, and by

and the mortgagees under the first mortgage of the P. Works, and to be incurred by them in carrying into effect the present arrangements,

except as hereinafter mentd; and in the next place, in paymt of the Form 25. rents, royalties, rates and taxes, salaries and other preferential claims hinbefore parly mentd or referred to, and after the several paymts afsd, to apply the balance in paymts of dividends to creditors, to be taken on account of the B. debentures, as referred to in the articles of association, and to be deemed to be paymts out of profits of the co for the ppses of clause 6 of this agreemt.

excepted

10. For realising that part of the ppty comprised in the sd second Company to schedule, which consists of coals, pitwood, oil, horse-food, and other take part of material supplied for the ppse of carrying on the business, the sd T. shall property. sell, and the co shall pchase the same at a price admitted or (in case of dispute) determined by arbitration to be the value thereof.

11. The co shall accept such title as the sd T. has to the ppty hby Title accepted. agreed to be made over, transferred, and assured, and shall pay all the expenses of preparing and executing the deeds for effectuating that object. The assurances shall be completed as soon as can be arranged.

12. If the liquidon of the separate estate of the sd A. be not closed on or before 10 Jan. 1876, or if the proofs against the sd separate estate shall exceed the sum of 24,000l. [agreement to be void, and liquidation to proceed].

13. [Similar provision as to B.'s separate estate.]

14. If any dispute shall arise as to the frame of any deed required for Arbitration. effectuating this agreemt, or as to any other matter under these presents (whether hinbefore specifically referred to arbitration or not) the same shall be referred to any counsel or other person named by the judge or any registrar of the London Bankruptcy Ct, at the instance of any party to the dispute, and [submission may be made order of court, &c.].

IN WITNESS, &e.

THE SCHEDULES ABOVE REFERRED TO.

First schedule [Particulars of mortgaged properties].

Second schedule: Sums of money now in the hands of the sd T.; bills of exchange and promissory notes now held by the sd T.; book debts due to the sd estate in respect of the sd business; securities for money due to the sd estate; stock and shares in public cos; scrap iron and old castings and certain other assets; all moneys due and owing to the said T. as such trustee in respect of the sales made of coals, iron, and other materials in carrying on the business of the co as aforesaid; the stock of stores remaining on hand, of coals, pitwood, oil, horse-food, and other materials supplied to the sd T. as such trustee in carrying on the sd business; surplus locomotive and other engines, and any other assets which shall be determined by the trustee not to be properly taken into account for the purpose of the sale of the works as a going concern. [Other Schedules.]

E

Form 25.

Under s. 28 of the Bankruptcy Act, 1869, the Court in several cases sanctioned a scheme whereby the assets were made over to a company in consideration of shares or debentures for the unsecured creditors. The above Form is taken from an agreement consequent on a scheme which was so sanctioned. See Ex parte Turquand, 3 C. D. 445. The articles of association provided for the issue of debentures in place of the mortgages on the A. and P. properties, and for the issue of the B. debentures to the unsecured creditors, and of A. debentures to R. The profits were to be applied in payment of (1), the annuities; (2), 10,000l. per annum towards payment of principal and interest on the 128,000l. debentures, and 12,750l. per annum on the 183,000l. debentures; (3), the interest on the A. debentures to be issued to R.; (4), the payment of the B. debentures. The articles provided for meetings of the different classes of debenture holders, and the business was to be managed by a committee of control until the B. debentures were all paid off.

The following are a few of the cases on s. 28 of the Bankruptcy Act, 1869:Merchant Banking Co., 16 C. Div.: the Court is bound to consider the objections of dissentients: and all the circumstances: In re Hickman, 32 W. R. 173. Ex parte Bacon, 17 C. Div. 447: after scheme accepted bankrupt, though undischarged, can apply to reduce proof. In re Chidley, 1 C. D. 177; Crew v. Terry, 2 C. P. D. 403, rights of execution creditors after scheme. Ex parte Turquand, 3 C. D. 445, issue of debentures, sureties: Ex parte Ranby, 14 C. D. 467, taxation of trustees' costs after scheme: West v. Baker, 1 Ex. D. 44, setoff, whether effected by scheme.

Under s. 18 of the Bankruptcy Act, 1883, the Court is given full discretion as to approval of scheme, and to enforce or annul it. The scheme is to bind all the creditors except (s. 19) as regards debts and liabilities not affected by an order of discharge unless the creditor assents to the scheme. As to the excepted debts and liabilities, see s. 30, which includes, inter alia, any debt or liability incurred by means of any fraud or fraudulent breach of trust.

For schemes under the Joint Stock Companies Arrangement Act, 1870, see infra, Form 728 et seq.

Form 26. AGREEMENT for SALE of HOTEL and OTHER ASSETS on a SCHEME of ARRANGEMENT under the BANKRUPTCY ACT.

Parties.

Recitals.

AN AGREEMT made the day of, between J., of, &c., (hereinafter called the trustee), of the first pt, N., of, &c. (hereinafter called the debtor), of the 2nd pt; D., of, &c. (hereinafter called the mtgee) of the 3rd pt; B. and C., of, &c. (hereinafter called the claimants), of the 4th pt; the creditors of the debtor (including the mtgee for the sum of 2,0827. only, and including the grantee of the bill of sale hereinafter mentd), such creditors (who are hereinafter referred to as the creditors) binding themselves by special resolutions as hereinafter mentd of the 5th pt; and the P— Hotel Co, Limtd. (hereinafter called the co), of the 6th pt. WHAS on, and for some time prior to the 26th January, 1877, the debtor carried on the business of an hotel keeper at the P― Hotel, 19, 21, and 22, X. Place, South Kensington. AND WHAS on the sd 26th of January, 1877, the debtor presented his peton to the London Bankruptcy Ct for the liquidon of his affairs by arrangemt or composition with his creditors, under which the sd J. was, on 26th January, 1877, appointed receiver of the ppty and manager of the business of

the debtor; and subsequently resolutions for liquidon by arrangemt of Form 26. his sd affairs were duly passed and registered, and on 9th March, 1877, the sd J. was duly appointed trustee of the ppty of the debtor : AND WHAS on 17th January, 1877, the debtor executed a bill of sale whereby he granted and assigned to M. (therein mentd) absolutely all the chattels then being or which should thereafter be in or about 19, X. Place, afsd, subject to a proviso for redemption on paymt to the sd M. of the sums in the sd bill of sale mentd; but it is considered that the chattels comprised in the sd bill of sale have become and are vested in the trustee, and divisible amongst the creditors, as being in the possession, erder, or disposition of the debtor, being a trader, by the consent and permission of the sd M. at the time of the filing of the sd peton: AND WHAS at the time of the filing of the sd peton the debtor was indebted to the creditors in various sums of money, and the mtgee was a creditor of the debtor of 4,0827., holding as security part of the debtor's estatenamely, the leases of Nos. 19, 21, and 22, X. Place afsd: AND WHAS at the time of the filing of the sd peton the debtor was bound by certain contracts entered into between the claimants and himself, relating to the letting by them and hiring by him of certain household furniture and effects, under a system commonly called the three years' hire system, and which sd household furniture and effects the claimants respectively claim as their own ppty: AND WHAS the mtgee has valued his sd security at the sum of 2,0007., and has proved in the sd liquidon for the balance of his claim and interest, amounting to the sum of 2,0827. AND WHAS the co has been formed and registered with a view to the pchase from the trustee by the co of the business of the P- Hotel, with the fixtures and effects therein, the ppty of the debtor in the sd liquidon, other than and except the sd household furniture and effects claimed by the claimants; and with a view to the adoption by the co of the sd contracts for letting and hiring the sd household furniture and effects claimed by the claimants, or some modifications thereof upon certain terms and conditions: AND WHAS it has been proposed as one of the terms of the sd purchase that the debtor shall enter into the engagemt hereinafter contd, which he has agreed to do provided he obtain his discharge under the sd liquidon: AND WHAS the mtgee has agreed with the co to take debentures of the co secured as a first charge upon the co's undertaking in respect of the sd sum of 2,000l., reserving his right to rank pari passu with the creditors in respect of the balance of his claim so proved by him as afsd: AND WHAS it is desirable that the liquidon of the estate of the debtor shall be closed: AND WHAS having regard to the statemt of his affairs submitted by the debtor to the statutory meeting of his creditors on the 21st day of February, 1877, and also to the delay, expense, and loss likely to accrue from the winding-up of the business of the sd hotel, and in disputing the several claims of the claimants and of the sd M., it is deemed for the benefit of the creditors that a scheme should be adopted for transferring to a co the business of the sd

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