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Companies Act 1993

Voluntary administration - Rights of secured creditor, owner, or lessor

239ABK: Meaning of terms used in this subpart

You could also call this:

“Explaining key terms for secured creditors during company administration”

In this part of the law, you’ll learn about two important terms: ‘decision period’ and ‘enforce’.

The ‘decision period’ is a specific timeframe for a secured creditor who has a charge over a company’s property when that company is in administration. This period starts when the administrator tells the secured creditor about their appointment, or when the administration begins if no notice is needed. It ends ten working days after it starts.

‘Enforce’ means different things a secured creditor can do with their charge over a company’s property during administration. This includes:

  • Appointing someone (called a receiver) to manage the property
  • Getting a court order to appoint a receiver
  • Taking control of the property themselves
  • Appointing someone else to take control of the property
  • Using any rights or powers they have because of the charge, whether these come from a written agreement, the law, or somewhere else

These definitions help you understand what secured creditors can do when a company is in administration, and when they can do it.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321564.

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“What happens when a secured creditor enforces their rights during company administration”

Part 15A Voluntary administration
Rights of secured creditor, owner, or lessor

239ABKMeaning of terms used in this subpart

  1. In this subpart, unless the context otherwise requires,—

    decision period means, in relation to a secured creditor holding a charge over property of a company in administration, the period that—

    1. begins—
      1. if notice of the appointment of the administrator must be given to the secured creditor under section 239ADW(1)(c), on the day when that notice is given; or
        1. in any other case, on the day when the administration begins; and
        2. ends at the end of the tenth working day after the day when it begins

          enforce, in relation to a charge over property of a company in administration, includes—

          1. to appoint a receiver of property of the company under a power contained in an instrument relating to the charge; or
            1. to obtain an order for the appointment of a receiver of that property for the purpose of enforcing the charge; or
              1. to enter into possession, or assume control, of that property for that purpose; or
                1. to appoint a person to enter into possession or assume control (whether as agent for the secured creditor or for the company) for that purpose; or
                  1. to exercise, as secured creditor or as a receiver or person so appointed, a right, power, or remedy existing because of the charge, whether arising under an instrument relating to the charge, under a written or unwritten law, or otherwise.

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