ARRANGEMENT WITH CREDITORS. Where a person is unable to pay his debts he may (apart altogether from the Bankruptcy Acts) endeavour to make an arrangement with his creditors with respect to the money he owes to them. A debtor usually offers ()) To pay the creditors so much in the pound in full satisfaction of his debts to them (see COMPOSITION WITH CREDITORS) or (2) To transfer his property to a trustee to be realised and the proceeds divided amongst the creditors. (Sec ASSIGNMENT FOR BENEFIT OF CREDITORS.) If such an arrangement is made by deed or agreement, the deed of arrangement must be registered within seven days. (See DEED OF ARRANGEMENT.) In the case of a proposed arrangement between a company and its creditors, the Companies (Consolidation) Act, 1908, Section 120, enacts : " (I) Where a compromise or arrangement is proposed between a company and its creditors or any class of them, or between the company and its members or any class of them, the court may, on the application in a summary way of the company or of any creditor or member of the com pany or, in the case of a company being wound up, of the liquidator, order a meeting of the creditors or class of creditors, or of the members of the company or class of members, as the case may be, to be summoned in such manner as the court directs.
" (2) If a majority in number representing three-fourths in value of the cre ditors or class of creditors, or mem bers or class of members. as the case may be, present either in person or by proxy at the meeting, agree to any compromise or arrangement, the compromise or arrangement shall, if sanctioned by the court, be binding on all the creditors or the class of creditors, or on the members or class of members, as the case may be, and also on the company or, in the case of a company in the course of being wound up, on the liquidator and contributories of the company.
" (3) In this Section the expression ' com pany ' means any company liable to be wound up under this Act."