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New Zealand law explained for everyone

Companies Act 1993

Voluntary administration - Administrator's liability and indemnity for debts of administration

239ADN: Lien to secure indemnity

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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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321625.

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239ADM: Administrator's right of indemnity has priority over other debts, or

“Administrator's repayment rights come before most other company debts”

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

239ADNLien to secure indemnity

  1. The administrator has a lien on the company's property to secure a right of indemnity under this subpart.

  2. 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.

Compare
  • Corporations Act 2001 s 443F (Aust)
Notes
  • Section 239ADN: inserted, on , by section 6 of the Companies Amendment Act 2006 (2006 No 56).