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Companies Act 1993

Voluntary administration - Set-off and netting agreements

239AEM: Transactions under netting agreement and effect on certain sections

You could also call this:

“Special rules for netting agreements during company administration”

When a company is in voluntary administration, certain rules apply to its transactions. These rules don’t stop section 56 from working. They also don’t stop sections 292, 297, or 298 from working, as long as section 239ACB allows it. This is true for transactions that are part of a netting agreement.

However, section 292(4A) doesn’t apply to transactions that are part of a netting agreement.

When looking at sections 292 and 297, a ‘transaction’ for a company doesn’t include a netting agreement the company made. But there’s an exception. If making the netting agreement reduced any amount the company owed or was owed when it made the agreement, that reduction is considered a transaction.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321654.

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239AEL: Application of set-off under section 239AEG to transactions subject to netting agreements, or

“Rules for handling set-offs in netting agreements during company administration”

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239AEN: Rights under netting agreement not affected by commencement of administration, or

“Netting agreements remain valid when a company enters administration”

Part 15A Voluntary administration
Set-off and netting agreements

239AEMTransactions under netting agreement and effect on certain sections

  1. Nothing in sections 239AEH to 239AEP prevents the operation of section 56 or, subject to section 239ACB, section 292, 297 or 298 in respect of a transaction that is subject to a netting agreement.

  2. However, nothing in section 292(4A) applies to a transaction that is subject to a netting agreement.

  3. For the purposes of sections 292 and 297, the term transaction, in relation to a company, does not include a netting agreement entered into by the company, except to the extent that the effect of entering into the netting agreement is to reduce any amount that was owing by or to the company at the time the company entered into the agreement.

Notes
  • Section 239AEM: inserted, on , by section 6 of the Companies Amendment Act 2006 (2006 No 56).
  • Section 239AEM(2): amended, on , by section 5 of the Companies Amendment Act (No 2) 2010 (2010 No 53).