11.11.09
You a Creditor Searching for a Unique Solution?
If you’re a creditor of a corporation and you’re not getting paid, don’t forget that many corporations have included a compromise provision in their articles of incorporation. The following provision has been a part of the State of Michigan pre-printed form for decades, and although it’s perfectly permissible for corporations to cross it off before filing the form, the vast majority of corporations leave it in, and therefore the provision is binding on the corporation and people dealing with the corporation:
When a compromise or arrangement or a plan of reorganization of this corporation is proposed between this corporation and its creditors or any class of them or between this corporation and its shareholders or any class of them, a court of equity jurisdiction within the state, on application of this corporation or of a creditor or shareholder thereof, or on application of a receiver appointed for the corporation, may order a meeting of the creditors or class of creditors or of the shareholders or class of shareholders to be affected by the proposed compromise or arrangement or reorganization, to be summoned in such manner as the court directs. If a majority in number representing 3/4 in value of the creditors or class of creditors, or of the shareholders or class of shareholders to be affected by the proposed compromise or arrangement or a reorganization, agree to a compromise or arrangement or a reorganization of this corporation as a consequence of the compromise or arrangement, the compromise or arrangement and the reorganization, if sanctioned by the court to which the application has been made, shall be binding on all the creditors or class of creditors, or on all the shareholders or class of shareholders, and also on this corporation.
It might offer you an avenue that’s not often considered.
