Section 120

Effect of composition

(1) An offer of composition which has been accepted as aforesaid shall be binding upon the insolvent and upon all the creditors of the insolvent estate in so far as their claims are not secured or otherwise preferent but the right of any preferent creditor shall not be prejudiced thereby, except, in so far as he has expressly and in writing waived his preference.

(2) If it be a condition of the composition that any property in the insolvent estate shall be restored to the insolvent, the acceptance of the composition shall divest the trustee of such property and re-invest the insolvent therewith as from the date upon which such property is in pursuance of the composition to be restored to the insolvent, but subject to any condition provided for in the composition.

(3) A composition shall not affect the liability of a surety for the insolvent.