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Companies Act 1993

Liquidations - Creditors' claims

302: Application of bankruptcy rules to liquidation of insolvent companies

You could also call this:

“Rules for handling debts when a company can't pay and is being shut down”

When a company can’t pay its debts and is being liquidated, some rules from bankruptcy law apply. These rules are about how to handle the company’s money and assets.

If you’re owed money by the company (which makes you a creditor), these rules affect you. They cover things like whether you have security for your debt, how to make a claim for what you’re owed, and how to value ongoing payments or future possible debts.

Anyone who would normally be able to claim money in a bankruptcy can do so in this kind of company liquidation too. They can get paid back some or all of what they’re owed, depending on what’s available.

If you make a claim under section 304 and the liquidator accepts it, it’s treated the same as a debt that’s been proven in a normal bankruptcy under the Insolvency Act 2006.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM322325.

Topics:
Business > Industry rules
Business > Fair trading
Money and consumer rights > Banking and loans
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301: Power of court to require persons to repay money or return property, or

“Court can order people to return money or property to a company being closed down”

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303: Admissible claims, or

“Types of claims that can be made when a company is being liquidated”

Part 16 Liquidations
Creditors' claims

302Application of bankruptcy rules to liquidation of insolvent companies

  1. Subject to this Part, the rules in force under the law of bankruptcy with respect to the estates of persons adjudged bankrupt apply in the liquidation of a company that is unable to pay its debts to—

  2. the rights of secured and unsecured creditors:
    1. claims by creditors:
      1. the valuation of annuities and future and contingent liabilities—
          1. and all persons who in any such case would be entitled to make claims and receive payment in whole or in part are so entitled in the liquidation.

        1. In applying in a liquidation the rules in force under the law of bankruptcy, a claim made under section 304 and admitted by a liquidator is to be treated as if it were a debt proved in accordance with the requirements of the Insolvency Act 2006.

        Notes
        • Section 302(2): amended, on , by section 445 of the Insolvency Act 2006 (2006 No 55).