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Companies Act 1993

Liquidations - Creditors' claims

310H: Rights under netting agreement not affected by commencement of liquidation

You could also call this:

“Netting agreements remain valid when a company is liquidated”

When a company is being liquidated, there are special rules about netting agreements. A netting agreement is a contract that allows parties to settle multiple transactions by combining them into a single net amount.

Even if a company is being liquidated, the rights in a netting agreement are still valid. This means that if something happens that the netting agreement says allows it, the agreement can still be ended. This could include the appointment of a liquidator.

If the netting agreement is ended, the parties can still work out how much money they owe each other based on the transactions covered by the agreement. This is true even if it happens after the liquidation has started.

These rights from the netting agreement are not affected by section 248(1), which is another part of the law about what happens when a company is liquidated.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM322382.

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Part 16 Liquidations
Creditors' claims

310HRights under netting agreement not affected by commencement of liquidation

  1. Nothing in section 248(1) affects, in respect of a company in liquidation, 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 a liquidator) occurring not later than the commencement of the liquidation; 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 310H: inserted, on , by section 15 of the Companies Amendment Act 1999 (1999 No 19).