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Deposit Takers Act 2023

Crisis management and resolution - Conduct of resolution - Bank may dispose of business undertaking or property, rights, or liabilities

324: When proceeds of sale of licensed deposit taker’s property must be paid to holder of security interest

You could also call this:

"When the Bank sells a licensed deposit taker's property, who gets the sale money first?"

Illustration for Deposit Takers Act 2023

If the Bank sells a licensed deposit taker's property, you need to know what happens to the money from the sale. The Bank can sell the property under section 319(1) of the Deposit Takers Act 2023. The property might have a security interest, which is like a special kind of loan.

When the Bank sells the property, the person with the security interest gets paid first from the sale money. They get paid before anyone else, except the Bank gets to take out the costs of selling the property. This means the person with the security interest is paid before other people who might have claims on the money.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS534958.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rules
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323: Bank may sell, transfer, or dispose of property despite security interest, or

"Banks can sell property even if someone else has a claim on it"

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325: When property continues to be subject to security interest, or

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Part 7Crisis management and resolution
Conduct of resolution: Bank may dispose of business undertaking or property, rights, or liabilities

324When proceeds of sale of licensed deposit taker’s property must be paid to holder of security interest

  1. This section applies if—

  2. the Bank sells, transfers, or otherwise disposes of any property under section 319(1); and
    1. the property is subject to a security interest (other than a security interest of the kind described in section 327).

      1. The person entitled to the security interest must be paid out of the proceeds of sale, transfer, or other disposition in priority to all other claims other than the Bank’s costs in selling, transferring, or otherwise disposing of the property.

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