Plain language law

New Zealand law explained for everyone

Companies Act 1993

Liquidations - Creditors' claims

309: Claims relating to debts payable after commencement of liquidation

You could also call this:

“How to value future debts when a company is being liquidated”

When a company is being liquidated, you need to know how to handle debts that would normally be due after the liquidation starts. If a debt would be due 6 months or later after the liquidation begins, you need to figure out its present value.

To find the present value, you subtract some interest from the total debt amount. The interest is calculated using the rate defined in section 12(3) of the Interest on Money Claims Act 2016. You use this rate as it was on the day the liquidation started. You calculate the interest for the time between when the liquidation began and when the debt would normally be due.

This helps to make sure that all debts are treated fairly, even if they weren’t due to be paid right away. It’s a way to balance things out and give each debt the right importance in the liquidation process.

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 It might be out of date or be missing some parts.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=DLM322335.

Topics:
Business > Industry rules
Business > Fair trading
Previous

308: Fines and penalties, or

“Companies must pay fines and penalties for breaking laws, even during liquidation”

Next

310: Mutual credit and set-off, or

“How debts are balanced when a company is being liquidated”

Part 16 Liquidations
Creditors' claims

309Claims relating to debts payable after commencement of liquidation

  1. A claim in respect of a debt that, but for the liquidation, would not be payable until a date that is 6 months, or later than 6 months, after the date of commencement of the liquidation is to be treated, for the purposes of this Part, as a claim for the present value of the debt.

  2. For the purposes of subsection (1), the present value of a debt is to be determined by deducting from the amount of the debt interest at the interest rate as defined in section 12(3) of the Interest on Money Claims Act 2016 (as at the date of commencement of the liquidation) for the period from the date on which the company is put into liquidation to the date when the debt is due.

Notes
  • Section 309(1): amended, on , by section 13 of the Companies Amendment Act 1999 (1999 No 19).
  • Section 309(2): amended, on , by section 29 (transitional provision applies, see Schedule 1 clause 6) of the Interest on Money Claims Act 2016 (2016 No 51).