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Class Composition in Schemes of Arrangement

Stephanie Yeo

[2022] SAL Prac 13

A crucial element to any scheme of arrangement is the question of how creditors are to be classed for voting purposes. In this regard, while the proper test for the classification of scheme creditors is well established, the increasing sophistication of restructuring deals has resulted in recent decisions that reveal finer aspects of the implementation of this test. This article explores the practical issues that appear to be arising with increasing frequency in relation to the composition of creditor classes and proposes a framework for the determination of classification issues.