Plain language law

New Zealand law explained for everyone

Companies Act 1993

Voluntary administration - Single administration of related companies in administration

239AER: Court may order single administration for related companies in administration

You could also call this:

“Court can combine management of related companies in financial trouble”

When two or more companies that are related to each other are in administration, you can ask the court to manage them together as if they were one company. The court can do this if they think it’s fair and right. They might set some rules about how this should work.

If you’re the administrator or someone the company owes money to, you can ask the court to do this. The court can also make other decisions or give instructions to help make this happen.

It’s important to know that just because people trusted a company because it was related to another company, that’s not a good enough reason for the court to manage the companies together.

The court has the power to change how they manage these related companies at any time if they need to.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321660.

Topics:
Business > Industry rules
Business > Fair trading
Crime and justice > Courts and legal help
Previous

239AEQ: Interpretation of terms for purposes of this subpart, or

“Definitions for managing groups of related companies together”

Next

239AES: Notice that application filed must be given to administrators and creditors, or

“Telling administrators and creditors about your court application for a company in voluntary administration”

Part 15A Voluntary administration
Single administration of related companies in administration

239AERCourt may order single administration for related companies in administration

  1. If 2 or more related companies are in administration, the court may, if it is satisfied that it is just and equitable, order that the administration in respect of each company must proceed together as if they were 1 company to the extent that the court orders and subject to the terms and conditions that the court imposes.

  2. An application under subsection (1) may be made by the administrator or a creditor of any of the companies in administration.

  3. Notwithstanding anything in this Part, the court may, on first making the order and otherwise from time to time, make any other order, or give any direction to facilitate giving effect to an order, under subsection (1) as it sees fit.

  4. The fact that creditors of the company in administration relied on the fact that another company was, or is, related to it is not a ground for making an order under this section.

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