Plain language law

New Zealand law explained for everyone

239ADM: Administrator's right of indemnity has priority over other debts
or “Administrator's repayment rights come before most other company debts”

You could also call this:

“Administrator's right to company property to ensure repayment”

When you’re the administrator of a company in voluntary administration, you have a special right called a lien. This lien is like a legal claim on the company’s property. It’s there to protect you and make sure you can get paid back for any costs you have while doing your job.

The lien is important because it gives you a way to secure your right to be paid back. This right to be paid back is called an indemnity. The lien works by giving you a claim on the company’s property that’s stronger than most other claims.

If there are other people who have claims on the company’s property (like banks with mortgages), your lien is usually more important than their claims. This means you’re more likely to get paid back before they do.

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Next up: 239ADO: Court's general power

or “The court can make decisions about how the rules apply to a company”

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Companies Act 1993
Voluntary administration
239ADN: Lien to secure indemnity

Part 15A Voluntary administration
Administrator's liability and indemnity for debts of administration

239ADNLien to secure indemnity

The administrator has a lien on the company's property to secure a right of indemnity under this subpart.
A lien under subsection (1) has priority over a charge to the same extent as the right of indemnity has priority over debts secured by the relevant charge.

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