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Companies Act 1993

Voluntary administration - Protection of company's property during administration

239ABI: Lis pendens taken to exist

You could also call this:

“Company in voluntary administration treated as if bankruptcy proceedings have started”

When a company is in voluntary administration, the law treats it as if someone has applied to make the company bankrupt. This is important because it affects how people can buy or lend money to the company.

You might hear lawyers use a fancy Latin term, ‘lis pendens’, which means ‘lawsuit pending’. Even though no one has actually asked for the company to be made bankrupt yet, the law pretends that they have. This helps protect people who might want to do business with the company while it’s in trouble.

Remember, this only matters for specific laws about ‘lis pendens’ and how it affects buyers or lenders. It’s a way to make sure everyone knows the company is in a tricky situation, even if they haven’t officially started the process to shut it down.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321561.

Topics:
Business > Industry rules
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Part 15A Voluntary administration
Protection of company's property during administration

239ABILis pendens taken to exist

  1. This section has effect only for the purposes of a law about the effect of a lis pendens on purchasers or mortgagees.

  2. During the administration of a company, an application for the appointment of a liquidator to the company is taken to be pending.

  3. An application that is taken because of subsection (2) to be pending constitutes a lis pendens.

Compare
  • Corporations Act 2001 s 440H (Aust)
Notes
  • Section 239ABI: inserted, on , by section 6 of the Companies Amendment Act 2006 (2006 No 56).