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New Zealand law explained for everyone

Companies Act 1993

Voluntary administration - Watershed meeting

239ABA: What creditors may decide at watershed meeting

You could also call this:

“Creditors choose the company's future at a crucial meeting”

At the watershed meeting, you and the other creditors can make one of three decisions about the company:

You can decide that the company should sign a deed of company arrangement. This is a formal agreement that sets out how the company’s affairs will be managed. You can choose any deed you want, even if it’s different from what was proposed before the meeting.

You can decide to end the administration. This means the company will go back to how it was run before the administration started.

If the company isn’t already being wound up, you can choose to appoint a liquidator. This person will take control of the company and sell its assets to pay off its debts.

Remember, you have these three options to choose from at the watershed meeting. You and the other creditors will need to think carefully about what’s best for everyone involved.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321552.

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“Postponing the watershed meeting for up to 30 working days or longer with court approval”

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239ABB: What happens if proposed deed not fully approved at watershed meeting, or

“Creditors can review the draft deed if full agreement isn't reached at the watershed meeting”

Part 15A Voluntary administration
Watershed meeting

239ABAWhat creditors may decide at watershed meeting

  1. At the watershed meeting, the creditors may—

  2. resolve that the company execute a deed of company arrangement specified in the resolution (and it does not matter that the deed to be executed differs from any proposed deed of which details were given in the notice of the meeting); or
    1. resolve that the administration should end; or
      1. unless the company is already in liquidation, by resolution appoint a liquidator.

        Compare
        • Corporations Act 2001 s 439C (Aust)
        Notes
        • Section 239ABA: inserted, on , by section 6 of the Companies Amendment Act 2006 (2006 No 56).