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Companies Act 1993

Voluntary administration - Execution and effect of deed of company arrangement

239ACX: Court may rule on validity of deed

You could also call this:

“Court can decide if a deed of company arrangement is valid”

If you’re not sure if a deed of company arrangement is valid, you can ask the court to decide. The court can rule on whether the deed was made correctly or follows the rules.

You, the deed administrator, a shareholder, a creditor, the Financial Markets Authority (if the company is involved in financial markets), or the Registrar can ask the court to check the deed.

When asked, the court can say if the deed is valid or not. If the deed breaks a rule, the court might still say it’s okay if the rule was mostly followed and no one will be treated unfairly.

If part of the deed is not valid, the court can change it, but only if the deed administrator agrees.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321606.

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

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239ACY: Administrator includes deed administrator, or

“Administrator also refers to deed administrator in this part of the Act”

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

239ACXCourt may rule on validity of deed

  1. The court may rule on the validity of a deed of company arrangement if there is doubt, on a specific ground, whether a deed of company arrangement—

  2. was entered into in accordance with this Part; or
    1. complies with this Part.

      1. An application under this section may be made by—

      2. the deed administrator; or
        1. a shareholder or creditor of the company; or
          1. the FMA (if the company is a financial markets participant); or
            1. the Registrar.

              1. On an application under this section,—

              2. the court may declare the deed void or not void:
                1. if the deed is void for contravention of a provision of this Part, the court may validate the deed, or any part of it, provided the court is satisfied that—
                  1. the provision was substantially complied with; and
                    1. no injustice will result for anyone bound by the deed if the contravention is disregarded.

                    2. The court may, if it declares that a provision of the deed is void, vary the deed, but only if the deed administrator consents.

                    Compare
                    • Corporations Act 2001 s 445G (Aust)
                    Notes
                    • Section 239ACX: inserted, on , by section 6 of the Companies Amendment Act 2006 (2006 No 56).
                    • Section 239ACX(2)(ba): inserted, on , by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).