Compositionwith Creditors

Composition with Creditors, an alternative course of proceeding by any one in insolvent circumstances to that of bankruptcy, which has always been of extensive use, being in many respects more convenient, and not entailing the publicity of bankruptcy. The general principles of the law of bankruptcy, however, apply to a composition, though in some of its details it differs from the course devised for a bankruptcy, and it is expressly provided by the existing "Bankruptcy Act, 1883," that the trustee (if any), under a composition or scheme of arrangement under that Act, shall have the same powers and perform the same duties as a trustee under a bankruptcy, and that the property of the debtor shall be distributed in the same manner as in bankruptcy, and generally that all the provisions of that Act with reference to bankruptcy shall also apply (mutatis mutandis) to such a composition or deed of arrangement. The true spirit of the bankruptcy laws has always been to provide the easiest way of carrying out amicable arrangements between a man and his creditors freed from external interference, so far as the prevention of fraud and commercial morality would permit. Two methods of proceeding have consequently been authorised by the Legislature for this purpose; these are by composition or scheme of arrangement either before or after adjudication.