Section 120. Power of Court in relation to objection by creditor

(1) An application by a creditor under section 118 shall be determined by the Court in accordance with this section.

(2) The Court shall make an order cancelling the resolution if, at the time the application is considered, the resolution has not been cancelled previously, any debt or claim on which the application was based is outstanding and the Court is satisfied that—

(a) the debt or claim has not been secured and the applicant does not have other adequate safeguards for the debt or claim; and

(b) it is not the case that security or other safeguards are unnecessary in view of the assets that the company would have after the reduction.

(3) If the Court is not satisfied to make an order under subsection (2), the Court shall dismiss the application.

(4) Where the Court makes an order under subsection (2), the company shall lodge a copy of the order to the Registrar within fourteen days from the date the order is made.

(5) For the purposes of this section—

(a) a debt is outstanding if it has not been discharged; and

(b) a claim is outstanding if it has not been terminated.

(6) The company and every officer who contravene subsection (4) commit an offence.