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239AEG: Mutual credit and set-off
or “Balancing debts and credits between a company and its creditors under a deed of company arrangement”
You could also call this:

“Rules for written netting agreements and how they apply”

You need to know about some rules for netting agreements. These rules are in sections 239AEI to 239AEP of the Companies Act 1993.

These rules apply to netting agreements that are written down. They apply even if the agreement was made before these rules were created. The rules cover all the things you have to do under a netting agreement, no matter what type of money is used.

The rules still work even if someone sells their rights under the agreement when they’re not supposed to. They also work if someone creates a charge or interest in those rights when they’re not allowed to.

These rules don’t apply to money that shareholders pay for their shares or to pay for calls on their shares.

Remember, if you want to know more about how these rules work, you can look at sections 239AEI to 239AEP of the Companies Act 1993.

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Next up: 239AEI: Calculation of netted balance

or “How to work out the final amount owed under a netting agreement”
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Part 15A Voluntary administration
Set-off and netting agreements

239AEHApplication of set-off under netting agreement

  1. Sections 239AEI to 239AEP apply—

  2. to a netting agreement—
    1. made in or evidenced by writing; and
      1. in which the application of sections 239AEI to 239AEP has not been expressly excluded; and
        1. whether made before or after the commencement of this section; and
        2. to all obligations under a netting agreement (whether those obligations are payable in New Zealand currency or in some other currency).

          1. Sections 239AEI to 239AEP apply despite—

          2. any disposal of rights under a transaction that is subject to a netting agreement, in contravention of a prohibition in the netting agreement; or
            1. the creation of a charge or other interest in respect of the rights referred to in paragraph (a) in contravention of a prohibition in the netting agreement.

              1. Nothing in sections 239AEI to 239AEP applies to an amount paid or payable by a shareholder—

              2. as the consideration, or part of the consideration, for the issue of a share; or
                1. in satisfaction of a call in respect of an outstanding liability of the shareholder made by the board of the company or by the administrator.

                  Notes
                  • Section 239AEH: inserted, on , by section 6 of the Companies Amendment Act 2006 (2006 No 56).