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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

326: When proceeds of sale of shares or property of new body corporate must be paid to holder of security interest

You could also call this:

"Paying the owner of a security interest when a bank sells a new company's shares or property"

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When the Bank sells shares or property of a new company, you need to know what happens to the money. If the Bank sells shares in a company and the company's property has a security interest, or if the Bank sells the company's property that has a security interest, the person with the security interest gets paid first. The security interest must not be the kind described in section 327.

The person with the security interest gets paid from the sale money before anyone else, except the Bank gets to take out its costs. The company is one that was formed and registered under section 320(1)(a). This means the company is a new body corporate, and it has its own shares and property.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS534960.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rules
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325: When property continues to be subject to security interest, or

"What happens to a security interest when a bank sells property to a new company"

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327: Kind of security interest referred to in various sections, or

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

326When proceeds of sale of shares or property of new body corporate must be paid to holder of security interest

  1. This section applies if—

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

      2. In this section, B is a body corporate that is formed and registered under section 320(1)(a).

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