Plain language law

New Zealand law explained for everyone

Companies Act 1993

Amalgamations

226: Powers of court in other cases

You could also call this:

“Court can intervene in company mergers to ensure fairness”

If a company wants to join with another company, the court can step in to make sure it’s fair for everyone. If you’re a shareholder, someone the company owes money to, or someone the company has promised something to, and you think the joining of companies (called an amalgamation) isn’t fair to you, you can ask the court for help.

You need to ask for help before the companies actually join. The court can then make any decision it thinks is right. For example, it can say the companies can’t join, or it can change the plan for how they join. The court might also tell the company to think about its plan again.

When the court makes these decisions, it can also set conditions that need to be followed. This means the court can say exactly how things should happen to make sure everyone is treated fairly.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321159.

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Part 13 Amalgamations

226Powers of court in other cases

  1. If the court is satisfied that giving effect to an amalgamation proposal would unfairly prejudice a shareholder or creditor of an amalgamating company or a person to whom an amalgamating company is under an obligation, it may, on the application, made at any time before the date on which the amalgamation becomes effective, of that person, make any order it thinks fit in relation to the proposal, and may, without limiting the generality of this subsection, make an order—

  2. directing that effect must not be given to the proposal:
    1. modifying the proposal in such manner as may be specified in the order:
      1. directing the company or its board to reconsider the proposal or any part of it.

        1. An order may be made under subsection (1) on such conditions as the court thinks fit.