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Companies Act 1993

Voluntary administration - Variation and termination of deed

239ADD: Termination by court

You could also call this:

“Court can end a company arrangement if asked and there are good reasons”

A court can end a deed of company arrangement if someone asks them to. The people who can ask are the company, a creditor, the deed administrator, or any other interested person.

The court might end the deed if:

  • Someone gave wrong or missing information that was important for creditors to decide about the deed.
  • Someone seriously broke the rules of the deed.
  • The deed can’t work without being unfair or taking too long.
  • The deed, or something done under it, is unfair to creditors or not good for the company.
  • There’s another good reason to end it.

Before ending the deed, the court must think about how it might affect other people involved.

Wrong information could be lies about the company’s business or money situation. This information might have been given to the administrator, the creditors, or put in a report for an important meeting. If information was left out of this report, that could also be a problem. The wrong or missing information must be something that would likely matter to creditors when they were deciding whether to agree to the deed.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321614.

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239ADC: Termination of deed, or

“How a deed of company arrangement can end and what happens after”

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239ADE: Termination by creditors, or

“How creditors can end a deed if its rules are seriously broken”

Part 15A Voluntary administration
Variation and termination of deed

239ADDTermination by court

  1. The court may terminate a deed of company arrangement on the application of—

  2. the company; or
    1. a creditor; or
      1. the deed administrator; or
        1. any other interested person.

          1. The court may terminate a deed of company arrangement if it is satisfied that—

          2. an information breach has occurred; or
            1. there has been a material contravention of the deed by a person bound by it; or
              1. effect cannot be given to the deed without injustice or undue delay; or
                1. the deed or a provision of it is, an act or omission done or made under the deed was, or an act or omission proposed to be done or made under the deed would be,—
                  1. oppressive or unfairly prejudicial to, or unfairly discriminatory against, 1 or more of the creditors; or
                    1. contrary to the interests of the company as a whole; or
                    2. the deed should be terminated for some other reason.

                      1. The court must not terminate the deed without first taking into account the rights of third parties.

                      2. In this section, an information breach has occurred if—

                      3. false or misleading information about the company's business, property, affairs, or financial circumstances—
                        1. was given to the administrator or the creditors; or
                          1. was contained in a report or statement under section 239AU(3) that accompanied a notice of the watershed meeting at which a resolution that the company execute a deed of company arrangement was passed; or
                          2. there was an omission from the report or statement referred to in paragraph (a)(ii); and
                            1. the information or the omission, as the case may be, can reasonably have been expected to be material to the creditors in deciding whether to vote in favour of the resolution that the company execute the deed of company arrangement.

                              Compare
                              • Corporations Act 2001 s 445D (Aust)
                              Notes
                              • Section 239ADD: inserted, on , by section 6 of the Companies Amendment Act 2006 (2006 No 56).