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Companies Act 1993

Voluntary administration - Watershed meeting

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

You could also call this:

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

If you and other creditors decide at the watershed meeting that the company should make a deed of company arrangement, but you don’t fully agree on all the details, here’s what happens:

The administrator must write up a draft of the deed. They will then share this draft with you and the other creditors.

At the watershed meeting, the administrator needs to tell you two important things. First, you have the right to look at the draft deed and give your thoughts on it. Second, even though the administrator will listen to what you say, they are in charge of writing the final version. This means the deed that is actually signed might be different from the draft you see.

Remember, if you want to know more about what the administrator needs to do when writing and sharing the draft deed, you can check [section 239ACP].

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321553.

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Part 15A Voluntary administration
Watershed meeting

239ABBWhat happens if proposed deed not fully approved at watershed meeting

  1. If, at the watershed meeting, the creditors resolve that the company execute a deed of company arrangement, but the proposed deed is not fully approved at the meeting, then the administrator must take the steps set out in section 239ACP (briefly, the administrator must draft a deed and circulate it to creditors).

  2. The administrator must inform the creditors at the watershed meeting that—

  3. they have the right to inspect and comment on the draft deed; and
    1. the administrator has the ultimate responsibility for drafting the deed and the executed deed may differ from the draft.

      Notes
      • Section 239ABB: inserted, on , by section 6 of the Companies Amendment Act 2006 (2006 No 56).