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New Zealand law explained for everyone

Companies Act 1993

Liquidations - Voidable dispositions

296A: Dispositions of property after application but before appointment of liquidator

You could also call this:

“Rules for selling or giving away company property while waiting for liquidation decision”

If someone asks the court to make a company stop operating (liquidate), the company can’t give away or sell its things during a certain time. This time starts when someone asks the court to liquidate the company and ends when the court decides what to do.

But there are some times when the company can still give away or sell its things:

  • If it’s just doing normal business
  • If someone special (like an administrator or receiver) is looking after the company and they decide to do it
  • If the court says it’s okay

When we talk about ‘giving away or selling things’, we mean the same as what it says in section 345 of the Property Law Act 2007. The ‘things’ we’re talking about are also explained in that same section.

The time we’re talking about starts when someone asks the court to appoint a liquidator under section 241(2)(c). It ends when the liquidator is chosen or when the court decides what to do about the request.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS412351.

Topics:
Business > Industry rules
Business > Fair trading
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296B: Procedure for setting aside dispositions, or

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Part 16 Liquidations
Voidable dispositions

296ADispositions of property after application but before appointment of liquidator

  1. A disposition of a company’s property is voidable if it is made during the specified period.

  2. However, the disposition is not voidable if it is made—

  3. in the ordinary course of business of the company; or
    1. by an administrator, a deed administrator, or a receiver, on the company’s behalf; or
      1. under an order of the court.

        1. In this section,—

          disposition has the same meaning as in section 345 of the Property Law Act 2007

            property has the same meaning as in section 345 of the Property Law Act 2007

              specified period means the period beginning on the date on which an application is made to appoint a liquidator under section 241(2)(c) and ending at the time the liquidator is appointed (or the court otherwise disposes of the application).

              Notes
              • Section 296A: inserted, on , by section 53 of the Insolvency Practitioners Regulation (Amendments) Act 2019 (2019 No 28).