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Deposit Takers Act 2023

Crisis management and resolution - No creditor or shareholder worse off

368: Eligibility for compensation under this subpart

You could also call this:

"Who can get money back if a company they invested in gets into trouble"

Illustration for Deposit Takers Act 2023

You can get compensation if you are a creditor or shareholder of a company that is in trouble. This happens if the company's situation means you get less money than you would have if the company had been liquidated under New Zealand law. You get this compensation because you are treated unfairly.

You are treated unfairly if you get less money now than you would have if the company had been liquidated. The amount of compensation you get is calculated using rules in sections 373 to 376. These rules tell you how much money you should get.

The compensation is only for people who are creditors or shareholders of the company. They must have gotten less money because of what happened to the company. The amount of compensation is decided by following the rules in sections 373 to 376.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS547226.

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Money and consumer rights > Banking and loansBusiness > Industry rules
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Part 7Crisis management and resolution
No creditor or shareholder worse off

368Eligibility for compensation under this subpart

  1. A pre-resolution creditor or pre-resolution shareholder of an affected entity is eligible for a payment of compensation under this subpart if subsection (2) applies.

  2. This subsection applies if the creditor or shareholder has received, is receiving, or is likely to receive, as a result of the resolution of the entity, less favourable treatment than would have been the case had a liquidation of the entity under New Zealand law commenced immediately before the entity entered into resolution.

  3. The amount of compensation is the amount calculated under sections 373 to 376.