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Companies Act 1993

Voluntary administration - Execution and effect of deed of company arrangement

239ACP: Procedure if deed not fully approved at watershed meeting

You could also call this:

“What happens when a deed of company arrangement isn't fully approved at the watershed meeting”

If you and other creditors decide at the watershed meeting that the company should create a deed of company arrangement, but you don’t fully approve the proposed deed at that meeting, here’s what happens:

The administrator will write up the complete deed and send it to you and other creditors within 10 working days after the meeting. This is called the preparation period.

You and the other creditors then have 3 working days to look at the deed and give your thoughts. This is called the inspection period.

After that, the company and the deed administrator have 2 working days to sign the deed. This is called the execution period.

If the administrator needs more time to prepare the deed, they can ask the court for up to 10 more working days. But they have to ask for this extra time during the original preparation period.

If more time is needed to sign the deed, the administrator can ask the court for up to 2 more working days. They must ask for this during the original execution period.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321598.

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239ACO: Execution of deed, or

“How a company signs a deed of arrangement during voluntary administration”

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239ACQ: Creditor must not act inconsistently with deed, etc, before execution, or

“Creditors must follow proposed arrangement rules before the deal is signed”

Part 15A Voluntary administration
Execution and effect of deed of company arrangement

239ACPProcedure if 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—

  2. the administrator must draft the complete deed and circulate it to the creditors within 10 working days after the meeting (called in this section the preparation period); and
    1. the creditors have a period of 3 working days (called in this section the inspection period) after the end of the preparation period in which to inspect and comment on the deed; and
      1. the company and the deed administrator must execute the deed within 2 working days (called in this section the execution period) after the end of the inspection period.

        1. The court may extend the preparation period by up to 10 working days, on an application by the administrator, but only if the application is made within the original preparation period.

        2. The court may extend the execution period by up to 2 working days, on an application by the administrator, but only if the application is made within the original execution period.

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