197 Effects of conversion of non-cellular company into protected cell company

(1) Where a company is converted into a protected cell company by virtue of
of non-cellular company
into protected cell
section 196 —

(a) all property and rights to which it was entitled immediately
before that conversion remain its property and rights;

(b) it remains subject to all criminal and civil liabilities, and all
contracts, debts and other obligations, to which it was subject
immediately before that conversion;

(c) all actions and other legal proceedings which, immediately
before that conversion, could have been instituted or continued
by or against it may be instituted or continued by or against it in
its new name;


(d) a conviction, ruling, order or judgment in favour of or against
it before the conversion may be enforced by or against it after
the conversion; and

(e) subject to subsection (2), its members, shares, capital, assets
and liabilities are attributed between its cells, and between its
cells and the core, in accordance with the terms of any special
resolution which makes such provision as is mentioned in
section 196(4)(b).

(2) Regardless of the provisions of subsection (1)(e) and Part XIII, any
creditor who entered into a transaction with a company before that
company converted into a protected cell company shall have recourse to
all core and cellular assets (other than any cellular assets attributable to a
cell created after that conversion) in respect of any liability for that
transaction, unless the creditor has agreed otherwise.

(3) If the directors had no reasonable grounds for believing that the protected
cell company and each cell would satisfy the solvency test immediately
after the conversion, any director who signed the declaration of
compliance is personally liable to pay to the core or cell of the protected
cell company so much monies as the core or cells had to pay to a creditor
which the core or cells would not have had to pay, but for the provisions
of subsection (2).