Corporations Act 2001

CHAPTER 5 - EXTERNAL ADMINISTRATION  

PART 5.7B - RECOVERING PROPERTY OR COMPENSATION FOR THE BENEFIT OF CREDITORS OF INSOLVENT COMPANY  

Note: This Part applies to a sub-fund of a CCIV in a modified form: see Division 3 of Part 8B.6 (for provisions relating to Division 2B ), Division 5 of Part 8B.6 (for provisions relating to Divisions 2 and 2A ) and Division 6 of Part 8B.6 (for provisions relating to Divisions 3 , 4 , 5 and 6 ).

Division 4 - Director liable to compensate company  

Subdivision A - Proceedings against director  

SECTION 588K   CRIMINAL COURT MAY ORDER COMPENSATION  

588K(1)    
If:

(a) a court finds a person guilty of an offence under subsection 588G(3) in relation to the incurring of a debt by a company; and

(b) the court is satisfied that:

(i) the debt is wholly or partly unsecured; and

(ii) the person to whom the debt is owed has suffered loss or damage in relation to the debt because of the company's insolvency;

the court may (whether or not it imposes a penalty) order the first-mentioned person to pay to the company compensation equal to the amount of that loss or damage.

Note: Section 73A defines when a court is taken to find a person guilty of an offence.

588K(2)    

If:

(a) a court finds a person guilty of an offence based on subsection 588GAB(1) or 588GAC(1) relating to disposition of property by a company; and

(b) the court is satisfied that one or more creditors of the company suffered loss or damage because of the disposition and the company ' s insolvency;

the court may order the person to pay the company compensation equal to the loss or damage (whether or not the court imposes a penalty for the offence).