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Deposit Takers Act 2023

Crisis management and resolution - Bank may apply to put deposit takers and associated persons into liquidation

423: When court may appoint liquidator

You could also call this:

"Court can appoint a liquidator if a company can't pay its debts or has broken important rules"

Illustration for Deposit Takers Act 2023

The court can appoint a liquidator for a deposit taker if you apply under section 422 and the court is satisfied that the deposit taker cannot pay its debts. The court also looks at whether the deposit taker has broken any important rules, or if it is fair that the deposit taker is put into liquidation. When deciding this, the court uses rules from the Companies Act 1993, such as section 287, to help figure out if the deposit taker can pay its debts.

If you make an application under section 422, the court follows different rules than it normally would under section 241(4) of the Companies Act 1993. This means the court uses the rules in this section instead of the usual rules. The court's decision is based on what is fair and reasonable in the situation.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS535161.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rules
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422: Liquidation of licensed deposit takers and associated persons, or

"What happens when a bank or money keeper has to close down and sort out its finances"

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424: Licensed deposit taker not entitled to be informed about exercise of powers under this Part, or

"Licensed deposit takers don't get to know when certain powers are used against them."

Part 7Crisis management and resolution
Bank may apply to put deposit takers and associated persons into liquidation

423When court may appoint liquidator

  1. The court may, on an application under section 422, appoint a liquidator for A if it is satisfied that—

  2. A is unable to pay its debts (and, for that purpose, section 287 of the Companies Act 1993 applies with all necessary modifications whether or not A is a company); or
    1. A has persistently or seriously contravened any prudential obligation; or
      1. it is just and equitable that the deposit taker be put into liquidation.

        1. In the case of an application under section 422, subsection (1) applies instead of section 241(4) of the Companies Act 1993.