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239AEM: Transactions under netting agreement and effect on certain sections
or “Special rules for netting agreements during company administration”
You could also call this:

“Netting agreements remain valid when a company enters administration”

When a company is in administration, there are special rules about netting agreements. A netting agreement is a way for companies to balance what they owe each other. Even though the company is in administration, the netting agreement can still work in two ways:

  1. If something happens that the agreement says allows it, like the company going into administration, the agreement can be ended. This can happen for some or all of the deals covered by the agreement.

  2. The companies can still add up all the money they owe each other under the agreement.

These rights from the netting agreement are not changed by section 239Z, which is another part of the law about what happens when a company is in administration.

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Next up: 239AEO: Effect of declaration of person as recognised clearing house under section 310K

or “Recognising a clearing house applies rules from other sections”
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Part 15A Voluntary administration
Set-off and netting agreements

239AENRights under netting agreement not affected by commencement of administration

  1. Nothing in section 239Z affects, in respect of a company in administration, the exercise of any of the following rights under a netting agreement:

  2. the termination, in accordance with the netting agreement, of all or any transactions that are subject to the netting agreement by reason of the occurrence of an event specified in the netting agreement, being an event (including the appointment of an administrator) occurring not later than the commencement of the administration; or
    1. the taking of an account, in accordance with the netting agreement, of all money due between the parties to the netting agreement in respect of transactions affected by the termination.

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