Cap. 386 Art. 368Rights of creditors to oppose division.

(1) The division shall not take effect until three months from the date of the publication of the statement referred to in article 401(1)(e) relating to the extraordinary resolutions approving the division.

(2) During the aforesaid period of three months any creditor of any of the companies involved in a division whose debt existed prior to the publication of the statement referred to in article 401(1)(e), provided for pursuant to the registration required by virtue of article 361(5) may, by sworn application, object to the division, and if he shows good cause why it should not take effect, the court shall either uphold the objection or allow the division on sufficient security being given.

(3) In so far as a creditor of a company to which the obligation or liability has been allocated in accordance with the draft terms of division has not obtained satisfaction, the recipient companies shall be jointly and severally liable for that obligation: Provided that as regards the recipient companies other than the one to which the obligation or liability has been allocated, this liability shall be limited to the net assets allocated to each of those companies: Provided further that this sub-article shall not apply where the operation involving the division is subject to the supervision of the court in accordance with article 375 and a majority in number representing three-fourths in value of the creditors of the company to be divided have agreed to forego such joint and several liability at a meeting held pursuant to article 375(2)(c).

(4) The provisions of sub-articles (1), (2) and (3) shall apply to the debenture holders of the companies involved in a division so long as the division has not already been approved by the debenture holders, individually or by a special meeting of the debenture holders called specifically for the purpose, at which meeting all the debenture holders shall signify their consent.