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Companies Act 1993

Liquidations - The process of liquidation

245B: Creditor’s vote disregarded if liquidator considers creditor is related creditor

You could also call this:

“Liquidator can ignore votes from creditors they think are connected to the company”

When a company is being liquidated, the liquidator has the power to disregard a creditor’s vote if they think the creditor is related to the company. If this happens, and the creditor hasn’t already told the liquidator they’re not related, the liquidator must ignore their vote and tell them why in writing.

If you’re a creditor and the liquidator says you’re related when you’re not, you can ask the court to let your vote count. You need to do this within 10 working days of getting the notice from the liquidator. The court will only count your vote if they agree you’re not actually related to the company.

This rule helps make sure that only votes from independent creditors are counted when making decisions about a company that’s being closed down.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS412028.

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245A: Related creditor’s vote at meeting of creditors to be disregarded unless court orders otherwise, or

“Related creditors' votes don't count unless a court approves”

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245C: Further powers where court orders creditor’s vote be taken into account, or

“Court's additional powers after ordering a creditor's vote to be counted”

Part 16 Liquidations
The process of liquidation

245BCreditor’s vote disregarded if liquidator considers creditor is related creditor

  1. If the liquidator considers that a creditor that votes on a resolution at a meeting of creditors is a related creditor, and the creditor has not given notice under section 245A(2A), the liquidator must (unless the court orders otherwise)—

  2. disregard the creditor’s vote; and
    1. give notice in writing to the creditor stating the reasons for the liquidator’s view.

      1. The court may, on the application of the creditor, order that the creditor’s vote be taken into account if satisfied that the creditor is not a related creditor.

      2. The creditor must make any application under this section to the court within 10 working days of receiving the notice.

      Notes
      • Section 245B: inserted, on , by section 37 of the Insolvency Practitioners Regulation (Amendments) Act 2019 (2019 No 28).