Creditors scheme class composition checklist
A creditors scheme stands or falls on correct class composition. This checklist helps restructuring counsel map rights, interests, and proposed scheme treatment before the convening hearing.
This is a 12-step checklist for assessing class composition in a creditors scheme of arrangement under section 411 of the Corporations Act 2001 (Cth). It covers rights, interests, and fracturing risk.
The checklist
Map creditor population
Map the full creditor population and the debt they hold against the company.
Identify security and priority
Identify each creditor's security interests and statutory priority position.
Extract existing rights
Extract existing legal rights under the relevant debt documents.
Identify scheme rights
Identify the rights the scheme proposes each group to receive.
Apply Sovereign Life test
Apply the Sovereign Life test — can creditors consult together with a view to their common interest.
Check subordinated debt
Check the position of subordinated and intercompany creditors and whether they form a separate class.
Consider related party creditors
Consider related-party creditor exclusion from voting or separate classing.
Assess guarantee releases
Assess the treatment of guarantee and third-party releases and class effect.
Check cross-border rights
Check cross-border creditor rights and any Chapter 15 or foreign recognition needs.
Prepare class analysis
Prepare a class analysis table for counsel and the court.
Plan convening hearing
Plan the convening hearing, scheme administrator appointment, and meeting orders.
Diarise sanction steps
Diarise the sanction hearing, lodgement, and effective date steps.
When this checklist applies
Use when scoping a creditors scheme of arrangement or auditing a draft scheme for class composition risk.
Common pitfalls
- Secured and unsecured creditors grouped in one class
- Related party creditors voting without separate class
- Guarantee releases not explained in booklet
- Cross-border creditor rights ignored until sanction
- Convening hearing set before class analysis is complete
Run this checklist on a real matter
Quillio can map creditor rights across debt documents and build class composition tables. See /practice-areas/insolvency or start a free trial.
General creditors scheme guidance. Class composition is highly fact-sensitive — confirm with current court practice and specialist restructuring counsel.
Use this checklist on your matter.
Quillio can run this checklist on a specific NSW conveyancing matter — confirm each item, calculate adjustments, and generate the supporting documents. The free trial requires no credit card.
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