The Shandon Hydropathic Co., Ltd Petitioners [1911] ScotLR 943 (13 July 1911)

The Shandon Hydropathic Co., Ltd Petitioners [1911] ScotLR 943 (13 July 1911)

Section 120 of the Companies (Consolidation) Act 1908 empowers the court to sanction arrangements converting terminable debentures into perpetual debenture stock, provided statutory requirements are met and the scheme is reasonable; the objection of ultra vires is untenable.

Citation
[1911] ScotLR 943
Parties
Petitioner: The Shandon Hydropathic Company, Limited; Creditors: Debenture holders of The Shandon Hydropathic Company, Limited; Objector: John Tait Gowanlock and others (trustees of the late Robert Anderson)
Jurisdiction
Scotland
Judgment Date
13 July 1911
Procedural Posture
Petition / Final Judgment
Outcome
petition granted
Legal Topics
Arrangement With Creditors, Conversion of Debentures, Court Sanction of Compromise, Companies (consolidation) Act 1908 Section 120
Company Law Insolvency Law Arrangement With Creditors Conversion of Debentures Court Sanction of Compromise Companies (consolidation) Act 1908 Section 120

Case Brief

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Parties

The Shandon Hydropathic Company, Limited

Petitioner

Debenture holders of The Shandon Hydropathic Company, Limited

Creditors

John Tait Gowanlock and others (trustees of the late Robert Anderson)

Objector

Procedural Posture

Petition / Final Judgment

Legal Issues

  1. 1 Whether the court has power under section 120 of the Companies (Consolidation) Act 1908 to sanction an arrangement converting terminable debentures into perpetual debenture stock
  2. 2 Whether such arrangement is ultra vires the company

Ratio Decidendi

Section 120 of the Companies (Consolidation) Act 1908 empowers the court to sanction arrangements converting terminable debentures into perpetual debenture stock, provided statutory requirements are met and the scheme is reasonable; the objection of ultra vires is untenable.

Court Disposition

petition granted

Orders

  • Sanctioned the arrangement converting terminable debentures into perpetual debenture stock as agreed by the requisite majority of debenture holders.
  • Decerned accordingly.