Proposed Deed of Company Arrangement for Pooled Entities Sample Clauses

Proposed Deed of Company Arrangement for Pooled Entities. The Administrators’ opinion is that it is in the best interests of creditors of the Pooled Entities for each of the Pooled Entities to enter into a DOCA in substantially the form proposed by the Administrators. A statement setting out details of the DOCA proposed for each Pooled Entity is included in Appendix Y. The objective of the proposed DOCA is to replicate the advantages to creditors of liquidation of the Pooled Entities arising from the Deed of Cross Guarantee whilst avoiding the effects of liquidation which may cause disadvantage to creditors, particularly, the possible adverse impact of liquidation on the ability to trade and sell the ION Administration Group, and the likely delay and cost associated with conducting 18 separate liquidations. However, by entering into a DOCA, any opportunity to pursue recoveries from insolvent trading claims or voidable transactions would be foregone. As explained in section 10, it is the Administrators’ view that there is little prospect of any realisations from such sources. The advantages of the proposed DOCA may be summarised as follows. ▪ The creditors will derive the benefit of the Deed of Cross Guarantee in substantially the same manner as a liquidation, because the DOCA will pool all assets and liabilities, thus replicating the effect of the Deed of Cross Guarantee. ▪ It permits the sale process to be completed in an orderly manner. ▪ It provides the flexibility required to enable the Administrators to operate one or more of the businesses for a prolonged period, should this become necessary or beneficial. This might be with a view to achieving a better sale in the longer term, once restructuring initiatives have delivered increased value or, if a sale is not possible at all, to allow the business to trade down in an orderly manner to maximise the value of assets and trading cashflow. ▪ It will enable ION Automotive (New Zealand) Limited to continue trading without an insolvency appointment. ▪ It will result in cost savings for creditors by simplifying the management of creditor claims and the distribution of dividends from 18 separate entities. ▪ It will facilitate accelerated interim distributions. ▪ It will facilitate a structure whereby it is possible to effect a sale of the shares of one or more of the Pooled Entities, rather than a sale of the entity’s assets, should it be beneficial to the creditors to do so. Provision will be made in the DOCA such that if a share sale is required, the proceeds of th...