1. An agreement between a company and its members or creditors to restructure the business in some way; the procedure is mainly used when the company is in financial difficulties or to effect a takeover. It must be approved by a majority in number (holding 75% in value) of those creditors or members at separate meetings and sanctioned by the court. All creditors or members involved in the scheme are bound by it, although the court can make special provision for those who dissent. Agreements with company creditors can often be more conveniently concluded by a voluntary arrangement.
2. An agreement between a debtor and his or her creditors to arrange the debtor's affairs to satisfy the creditors. The debtor usually agrees to such an arrangement in order to avoid bankruptcy (See Bankruptcy Law). If the arrangement is agreed when no bankruptcy order has been made, it may take the form of either an ordinary private contract or a deed of arrangement. An arrangement agreed after a bankruptcy order has been made is governed by the statutory provisions relating to bankruptcy (see voluntary arrangement.)