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Companies Act 1993

Voluntary administration - Execution and effect of deed of company arrangement

239ACW: Effect of deed on company's debts

You could also call this:

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

When a company makes a deed of company arrangement, it can be released from some of its debts. This only happens if the deed says the debt will be released and if the person the company owes money to agrees to be bound by the deed.

If the company is released from a debt, this doesn’t mean that other people connected to the debt are also released. For example, if someone guaranteed the debt or promised to pay it if the company couldn’t, they still have to pay. Also, if someone promised to protect the person the company owes money to from losing out if the company didn’t pay, they still have to keep that promise.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321605.

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

239ACWEffect of deed on company's debts

  1. A deed of company arrangement releases the company from a debt only in so far as—

  2. the deed provides for the release; and
    1. the creditor concerned is bound by the deed.

      1. The release of the company from a debt under subsection (1) does not discharge or otherwise affect the liability of—

      2. a guarantor of the debt; or
        1. a person who has indemnified the creditor concerned against default by the company in relation to the debt.

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