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Companies Act 1993

Voluntary administration - Execution and effect of deed of company arrangement

239ACV: Court may restrain creditors and others from enforcing charge or recovering property

You could also call this:

“Court can temporarily stop actions against company property to help arrangement succeed”

When creditors decide at a watershed meeting that a deed of company arrangement should be made, the court can step in to help. The court can make an order that stops certain people from taking action against the company’s property.

If you’re a secured creditor, the court can stop you from using your charge on the company’s assets. If you own or rent out property that the company is using, the court can stop you from taking it back.

The court will only make this order if it thinks it’s really important for making the deed work. It will also make sure that your interests are protected if you’re the creditor, property owner, or lessor affected by the order.

Only the administrator can ask for this order if the deed hasn’t been signed yet. If the deed has been signed, only the deed administrator can ask for it.

The court can also add conditions to its order. This means they can set rules about how the order works.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321604.

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239ACU: Person bound by deed must not take steps to liquidate, etc, or

“Deed-bound people can't liquidate or sue company during arrangement”

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239ACW: Effect of deed on company's debts, or

“How a deed of company arrangement affects the company's debts and guarantors”

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

239ACVCourt may restrain creditors and others from enforcing charge or recovering property

  1. The court may, at any time after creditors have resolved at the watershed meeting that a deed of company arrangement be executed, order that, except as permitted by the order,—

  2. a secured creditor must not enforce or otherwise deal with the charge; or
    1. the owner or lessor of property that is used or occupied by the company or is in the company's possession must not take possession of the property or otherwise recover it.

      1. The court may make the order only if—

      2. it is satisfied that achieving the purposes of the deed would be materially adversely affected if the order was not made; and
        1. having regard to the terms of the deed and the order, and any other relevant matter, it is satisfied that the interests of the person affected by the order, that is the creditor, property owner, or lessor, will be adequately protected.

          1. An application for an order under this section may be made only,—

          2. if the deed has not yet been executed, by the administrator; or
            1. if the deed has been executed, by the deed administrator.

              1. The court's order may be made subject to conditions.

              Compare
              • Corporations Act 2001 s 444F (Aust)
              Notes
              • Section 239ACV: inserted, on , by section 6 of the Companies Amendment Act 2006 (2006 No 56).