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Companies Act 1993

Liquidations - Creditors' claims

310C: Calculation of netted balance

You could also call this:

“How to calculate the final amount owed in a netting agreement when a company is liquidated”

When a company that is part of a netting agreement goes into liquidation, you need to follow special rules. A netting agreement is a way to settle multiple financial transactions between parties.

You must calculate the netted balance according to the netting agreement. This netted balance is the final amount that the company either owes or is owed after all the transactions are added up.

This final amount is what can be claimed in the liquidation process if the company owes money. If the company is owed money, this is the amount that should be paid to the company.

The netted balance only applies to the transactions that were included in the calculation as per the netting agreement.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM322371.

Topics:
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“How set-off works in netting agreements for creditors' claims”

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310D: Mutuality required for transactions under bilateral netting agreements, or

“Bilateral agreements require transactions to be between the same parties”

Part 16 Liquidations
Creditors' claims

310CCalculation of netted balance

  1. If a company that is a party to a netting agreement is in liquidation,—

  2. any netted balance payable by or to the company must be calculated in accordance with the netting agreement; and
    1. that netted balance constitutes the amount that may be claimed in the liquidation or is payable to the company, as the case may be, in respect of the transactions that are included in the calculation.

      Notes
      • Section 310C: inserted, on , by section 15 of the Companies Amendment Act 1999 (1999 No 19).