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Companies Act 1993

Voluntary administration - Set-off and netting agreements

239AEI: Calculation of netted balance

You could also call this:

“How to work out the final amount owed under a netting agreement”

When a company in administration is part of a netting agreement, you need to calculate the netted balance according to that agreement. This netted balance is the final amount that either the company owes to a creditor or that is owed to the company.

If the netted balance shows that the company owes money, this is the debt that the creditor can claim under the deed of company arrangement. On the other hand, if the netted balance shows that money is owed to the company, this is the amount the company should receive.

The netted balance takes into account all the transactions included in the calculation as set out in the netting agreement. This method helps to simplify the process of working out what is owed when there are multiple transactions between the company and other parties.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321650.

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Part 15A Voluntary administration
Set-off and netting agreements

239AEICalculation of netted balance

  1. If a company in administration is a party to a netting agreement,—

  2. any netted balance payable by or to the company must be calculated in accordance with the netting agreement; and
    1. that netted balance constitutes, in respect of the transactions that are included in the calculation,—
      1. the debt that is owed to the creditor and that may be admitted under the deed of company arrangement; or
        1. the amount that is payable to the company,—
          2. as the case may be.

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