At first blush the two processes are very similar. It is important to note that the PWIF scheme will not make payments in respect of a voluntary liquidation. “The Insolvency and Bankruptcy Code, 2016 is a beneficial legislation which puts the corporate debtor back on its feet, not being a mere recovery legislation for creditors.”- Supreme Court of India inSwiss Ribbons Pvt. Prior to the IRDA, the procedures for a Scheme of Arrangement … The process The process of structuring and implementing an English scheme of arrangement requires the parties to a scheme of arrangement to go through the following stages: Schemes of Arrangement: Restructuring in the Cayman Islands November 2020 Ben Hobden Alex Davies We appreciate that these are challenging times and that the need for cross-border advice on insolvency and restructuring matters may be required at short notice. Scheme of Arrangement. However, by the Atlas Scheme (among others), we are witnessing the reintroduction of the scheme of arrangement. a formal insolvency procedure. Schemes of arrangement are frequently used by companies to give effect to a debt restructuring. Insolvency is not required, and a scheme of arrangement can be used in other scenarios, for example, for the reduction of share capital. – Writ Petition (Civil) No. Ltd. & Anr. Over recent years, the English law-governed scheme of arrangement has become an increasingly popular tool to implement debt restructuring solutions. 99 of 2018. Importantly, a scheme is neither an insolvency nor a bankruptcy process, and are relatively low profile in terms of publicity. This is a company voluntary arrangement (CVA), a procedure under the English insolvency legislation (though there is no requirement of insolvency) having similar effect to a scheme. restructuring plan, or the existing "tried and tested" scheme of arrangement. Like the scheme, the restructuring plan sits in the Companies Act 2006 rather than the Insolvency Act 1986. The procedure was introduced in the Insolvency Act 1986 as a simpler alternative to the Companies Act 1985 scheme of arrangement provisions (see Part 4 of this chapter). Both processes require members and creditors to be grouped into "classes" based on their rights. vs. Union of India & Ors. Creditor approval and court sanction are necessary, however. Schemes of arrangement are flexible: the legislation does not prescribe their terms. A scheme of arrangement must be approved by the court. However, see also the discussion under “Scheme of Arrangement” above regarding the operation of Hong Kong’s Protection of Wages on Insolvency Fund (“PWIF“) in a liquidation. A scheme of arrangement is a statutory, binding compromise reached between a company and its shareholders or creditors. 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