"B" debentures in the first place to the holders of "A" deben- Form 637.

tures, or to any of them.

(b.) They shall affix the company's seal to an indenture of trust or covering deed whereby the repayment pari passu of the principal money and interest secured by the said "B" debentures shall be secured by way of trust mortgage or charge on all the property of the company comprised in the said covering deed of the 12th of November, 1872, in priority to the said "A" debentures and the principal money and interest thereby secured. The trustees of the said covering deed of the 12th of November, 1872, shall also be parties to the said new covering deed for the purpose of postponing the said "A" debentures and the said security for the same.

(c.) They shall at the same time that they issue the said "B" debentures affix the company's seal to the said second covering deed, offer and (if accepted) issue to the holder of every "A" debenture a new fully paid-up share on the company of 301., to be taken in full discharge of the bonus of 301. payable to him under the said debenture, and also of all interest which may at the time of issuing the said share be due upon the "A" debenture in respect of which it shall be issued and such "A" debenture shall be a security only for 1007. and interest thereon at the rate of 127. per cent. per annum from the time of the issue of the said share. The said new shares shall be called and are herein referred to as "B" shares.

(d.) They shall at or before the issue of the said "B" shares affix the company's seal to a contract in writing between the company and all the holders of A debentures who shall accept B shares as aforesaid in discharge of the said bonus of 301. per debenture to which they are entitled, agreeing that the said B shares are and shall be deemed to be fully paid up, and shall duly file the said contract with the Registrar of Joint Stock Companies. (e.) The holders of B shares shall have the exclusive right of voting at all meetings of the company for the term of 10 years from the issue of B shares or the payment of the said B and A debentures whichever shall first happen, at the expiration of which time or the happening of which event the said exclusive right shall cease, and all holders of shares in the company shall vote according to the number of shares held by them. With this exception the said B shares shall for all purposes (except as to amount) rank with the existing shares in the company which shall hereinafter be called and are herein referred to as A shares, and the holders of the said B shares shall in addition to the temporary exclusive right of voting as aforesaid have all powers, rights and privileges in connection with the company as if they were holders of a corresponding number of "A" shares in company with 307. per share paid up thereon.

Form 637.

When to be

stayed.

What may be done.

Powers of new board.

Duties.

(c.) Generally the realisation and collection of the assets of the company except the property comprised in the indenture of trust or covering deed of 12 Nov. 1872, and thereby made a security for the repayment of the 200,0007. of original debentures already issued by the company and in this scheme referred to as "A" debentures.

(d.) The payment of the debts of the company other than those secured by the "A" debentures.

(e.) The payment of all the costs of the winding up including therein all the costs, charges and expenses of or connected with or arising out of this scheme of reconstruction whether the same shall be ultimately carried into effect or not.

2. When the above matters are completed all further proceedings in the liquidation shall be stayed on the liquidator's application, and the property and assets of the company in his hands shall be handed over to the new board of directors to be appointed as next hereinafter provided.

3. Notwithstanding the pendency of the liquidation of the company for the purposes aforesaid the following acts may be done and proceedings taken, that is to say

A general meeting of the company shall be called for the following purposes, namely:

1. The election of a new board of directors, for which purpose

all or

any of the existing directors may be removed from office by the said meeting. The new board of directors to be appointed from among members eligible for the appointment other than the removed directors (if any) and

2. The sanctioning by special resolution the issue of new shares to holders of "A" debentures as hereinafter provided.

4. The new board of directors when appointed shall have and perform all the powers and duties vested in the directors by the articles of association of the company, but nevertheless (until the completion of the liquidation as aforesaid) only to such an extent and in such a manner as not to interfere with the continuation of the liquidation as aforesaid.

5. The new board of directors shall as speedily as possible after their appointment do and carry out the following acts, arrangements and proceedings.

(a.) They shall borrow on behalf of the company a sum or sums of money not exceeding 30,0007. by the additional debentures (herein referred to as B debentures), securing the repayment of the money borrowed with interest at 12 per cent., and charging the same with interest at that rate on the property of the company comprised in the said covering deed of the 12th of November, 1872, in priority to the said "A" debentures and to all other charges and all principal monies or interest thereby secured, and they may if they see fit offer all or any of the said

"B" debentures in the first place to the holders of "A" deben- Form 637.

tures, or to any of them.

(b.) They shall affix the company's seal to an indenture of trust or covering deed whereby the repayment pari passu of the principal money and interest secured by the said "B" debentures shall be secured by way of trust mortgage or charge on all the property of the company comprised in the said covering deed of the 12th of November, 1872, in priority to the said "A" debentures and the principal money and interest thereby secured. The trustees of the said covering deed of the 12th of November, 1872, shall also be parties to the said new covering deed for the purpose of postponing the said "A" debentures and the said security for the same.

(c.) They shall at the same time that they issue the said "B" debentures affix the company's seal to the said second covering deed, offer and (if accepted) issue to the holder of every "A" debenture a new fully paid-up share on the company of 301., to be taken in full discharge of the bonus of 301. payable to him under the said debenture, and also of all interest which may at the time of issuing the said share be due upon the “A” debenture in respect of which it shall be issued and such "A" debenture shall be a security only for 1007. and interest thereon at the rate of 127. per cent. per annum from the time of the issue of the said share. The said new shares shall be called and are herein referred to as "B" shares.

(d.) They shall at or before the issue of the said "B" shares affix the company's seal to a contract in writing between the company and all the holders of A debentures who shall accept B shares as aforesaid in discharge of the said bonus of 301. per debenture to which they are entitled, agreeing that the said B shares are and shall be deemed to be fully paid up, and shall duly file the said contract with the Registrar of Joint Stock Companies. (e.) The holders of B shares shall have the exclusive right of voting at all meetings of the company for the term of 10 years from the issue of B shares or the payment of the said B and A debentures whichever shall first happen, at the expiration of which time or the happening of which event the said exclusive right shall cease, and all holders of shares in the company shall vote according to the number of shares held by them. With this exception the said B shares shall for all purposes (except as to amount) rank with the existing shares in the company which shall hereinafter be called and are herein referred to as A shares, and the holders of the said B shares shall in addition to the temporary exclusive right of voting as aforesaid have all powers, rights and privileges in connection with the company as if they were holders of a corresponding number of "A" shares in the company with 307. per share paid up thereon.

Form 637.

General provision.

(f.) The new board of directors shall out of the moneys to be raised by the issue of the said "B" debentures in the first place pay all the expenses of and connected with their issue, and in the next place pay over to the liquidator such a sum as he shall at the time require to enable him completely to pay or settle the then outstanding debts or liabilities of the company other than the sums secured by the said A and B debentures and the costs of the winding up including the costs, charges and expenses of this scheme and of the committee of debenture holders, including therein the costs and charges of the bill in Chancery filed by Mr. Louth, and the receivership thereunder, and shall stand possessed of the residue of the same money to be raised by the issue of the said B debentures for the general purposes of the reconstructed company.

(g.) The future profits of the reconstructed company shall for the purposes of interest and dividends be applied first in payment of interest at 12 per cent. on the said A debentures pari passu next in payment of dividends at 12 per cent. on all shares in the company both A and B pari passu, and the residue (if any) shall be divided equally between the holders of debentures "A" or "B" and the shareholders (whether of A or B shares) pari passu, the said debenture holders taking their share thereof by way of bonus and not in discharge pro tanto of the principal money due on their debentures respectively.

6. In all other respects the new board of directors shall carry on and manage the business and property of the company in accordance with the articles of association.

A petition secking the sanction of the court was presented by L. R. & T. The petition stated:

Form 638. Petition.

1. Formation of the company. 2. Terms of memorandum of association. 3. That the lands, oil wells, &c., were the property of W. the principal promoter of the company. 4. Agreement of 18 Dec. 1871, between W. and H. (as trustee for company) for sale of premises to company for 400,000l. payable as to 150,000l. in cash, and residue in 2,500 fully paid-up shares of 1007. Company to take plant, &c., at valuation. 5. Agreement adopted by company's articles. 6. Those of the said articles which are material to be here stated were in the words and figures following, &c.

7. & 8. The agreement was abandoned as to part of the premises, but the company proceeded to raise money by the issue of debentures, and thereout paid W. 150,000l., and 16,000l. for plant. Company also allotted to him 2,250 shares. 9. Company entered into possession. 10 & 11. Statements as to issue of debentures: the form. 12. No further debentures issued. 13. The said debentures are secured by an inden

ture of trust or covering deed dated, &c., and made, &c., whereby, &c. Form 638. [substance given]. 14. Registration of deed in Canada. 15. Company carried on business, and acquired other plant, &c. 16. W. manager, and S. secretary. 17 & 18. Dishonesty of manager and secretarymismanagement of business, losses, debts. 19. The interest payable on the said debentures at Midsummer, 1873, not having been paid, your petitioner L. on the 12th of July, 1873, filed a bill on behalf of himself and all other the holders of mortgage debentures of the company against the company and the said (trustees of covering deed) praying that it might be declared that the holders of the said debentures were entitled to a charge on all the real and personal property of the company in England and Canada and elsewhere for securing the principal monies, bonuses, and interest secured by the said debentures, and for an account of what was due thereon, and for an order on the company to pay the same, and for the sale of the real and personal property and business of the company, and the payment out of the proceeds of the monies secured by the said debentures, and that a proper person or persons might be appointed in the meantime to receive and manage the real and personal property and business of the company, and for an injunction restraining the company or its agents from intermeddling therewith, and for ancillary relief.

20. Appointment of petitioners as committee at mecting of debenture holders. 21. Receiver and manager appointed by Malins, V.-C., 31 July, 1873. 22. Petition to wind up. 23. Another petition to wind up. 24. Winding-up order made. 25. Appointment of official liquidator.

26. Audit of company's books and investigation of its affairs. 27. Discovery of dishonesty of manager, losses, &c. 28. Debts of the company amount to about 9,0007. in Canada, and 2007. in England, besides the principal, interest, and bonus on the said debentures. 29. The assets of the company consist of the following particulars, &c.

30. The property of the company in Canada can hardly in the present condition of the oil-trade be (as your petitioners are advised as aforesaid and fully believe) realised at all and at any rate could only be realised at an enormous loss, and the mere attempt to realise it would suffice finally to ruin the company. On the other hand the business of the company, if carefully and prudently conducted, is (as your petitioners are advised and believe) a profitable one, and likely to furnish the company with a good and increasing income, large enough, in fact, not only to provide for the expenses of management and the interest on the debentures, but to yield a considerable margin of clear profit.

31. The few creditors of the company in Canada (other than the debenture holders) are pressing for payment of their debts, and some (or all) of them have obtained judgments against the company, under which, if they are not paid, the property of the company in Canada can and will be taken in execution, and realised or attempted to be realised at whatever loss.

NN