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New Zealand law explained for everyone

Companies Act 1993

Compromises with creditors

234: Costs of compromise

You could also call this:

“Who pays for meetings about company debt compromises”

The costs of organising and running a meeting where creditors vote on a proposed compromise must be paid for. Here’s how it works:

If you’re the company, you usually have to pay for these costs.

If a receiver or liquidator sets up the meeting, the costs become part of the receivership or liquidation expenses.

If someone else organises the meeting, the company owes them the money for the costs. If the company is later put into liquidation, this debt gets paid according to the order set out in Schedule 7.

Remember, a court can change these rules if they decide to order something different.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321177.

Topics:
Business > Industry rules
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“How a compromise affects a company in liquidation”

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235: Interpretation, or

“Explaining key terms used in this part of the Companies Act”

Part 14 Compromises with creditors

234Costs of compromise

  1. Unless the court orders otherwise, the costs incurred in organising and conducting a meeting of creditors for the purpose of voting on a proposed compromise—

  2. must be met by the company; or
    1. if incurred by a receiver or a liquidator, are a cost of the receivership or liquidation; or
      1. if incurred by any other person, are a debt due to that person by the company and, if the company is put into liquidation, are payable in the order of priority specified in Schedule 7.