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Deposit Takers Act 2023

Crisis management and resolution - Conduct of resolution - Relationship between resolution and other legislation and processes

338: Prior insolvency process must cease

You could also call this:

"If a deposit taker is in trouble, other processes to shut it down must stop for now."

Illustration for Deposit Takers Act 2023

If you are a licensed deposit taker and you enter resolution, any winding up, liquidation, receivership, or voluntary administration that was already happening must stop while you are in resolution. The person who was appointed as liquidator, receiver, or administrator is no longer in that role. You will stop being in resolution if an Order in Council is made under section 282(1), and then the winding up, liquidation, receivership, or voluntary administration can start again. This will happen unless the Order in Council says something different, and it will be subject to the terms and conditions specified in the order.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS535234.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rules
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337: Bank, resolution manager, and other persons are not directors under any legislation, or

"Some people are not considered bosses of banks, even if they have important jobs."

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339: Continuation of resolution if restored, or

"What happens if a bank is removed and then added back to the register while being sorted out."

Part 7Crisis management and resolution
Conduct of resolution: Relationship between resolution and other legislation and processes

338Prior insolvency process must cease

  1. If a licensed deposit taker (A) enters resolution and A is already being wound up or is already in liquidation, receivership, or voluntary administration,—

  2. the winding up, liquidation, receivership, or voluntary administration must cease for so long as A continues to be in resolution; and
    1. the person appointed as liquidator, receiver, or administrator is discharged.

      1. If an Order in Council made under section 282(1) ends the resolution, the winding up, liquidation, receivership, or voluntary administration of A revives as if it had not ceased by reason of this section unless the order provides otherwise.

      2. Subsection (2) applies subject to the terms and conditions specified in the order.

      3. If the winding up, liquidation, receivership, or voluntary administration revives, the person specified in the order as such becomes, or resumes as, the liquidator, receiver, or administrator of A for the time being.

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