Section 674 of Insolvency Act CAP 53: Member or creditor of company may challenge actions of directors
(1) This section applies to and in relation to acts or omissions of the directors of a company during a moratorium.
(2) A creditor or member of the company may apply to the Court for an order under this section on the ground—
(a) that the company's affairs and property are being or have been managed by the directors in a manner that is unfairly detrimental to the interests of its creditors or members generally, or of a specific class of its creditors or members (including at least the applicant); or
(b) that any actual or proposed act or omission of the directors is or would be unfairly detrimental to those or any of those interests.
(3) An application for an order under this section may be made during or after the moratorium.
(4) On the hearing of an application for an order made under this section, the Court may—
(a) make such order as it considers appropriate for giving relief in respect of the matters complained of;
(b) adjourn the hearing conditionally or unconditionally; or
(c) make an interim order or such other order as it considers appropriate.
(5) In particular, an order under this section may—
(a) regulate the management by the directors of the company's affairs and property during the remainder of the moratorium; (b) require the directors—
(i) to refrain from doing or continuing an act complained of by the applicant; or
(ii) to do an act that the applicant has complained they have omitted to do;
(c) require a meeting of creditors or members to be convened for the purpose of considering such matters as the Court may specify;
(d) end the moratorium and make such consequential provision as the Court considers appropriate.
(6) In making an order under this section, the Court shall have regard to the need to safeguard the interests of persons who have dealt with the company in good faith and for value.
(7) An application for an order under this section may be made only by the administrator or, if there is one, the liquidator, if—
(a) the appointment of an administrator has effect in relation to the company and that appointment was made in accordance with—
(i) an application for administration of the company; or
(ii) a notice of intention to make such an appointment, made before the moratorium took effect; or
(b) the company is in liquidation in accordance with an application made before the moratorium took effect.
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