Insolvency Law Reform Act 2016 (11 of 2016)

Schedule 2   Amendments relating to the Insolvency Practice Schedule (Corporations)

Part 2   Amendments consequential on the introduction of the Insolvency Practice Schedule (Corporations)

Corporations Act 2001

90   At the end of Part 5.1 of Chapter 5

Add:

415A Outcome of voting at creditors' meeting determined by related entity - Court powers

(1) Subsection (3) applies if, on the application of a creditor of a Part 5.1 body, the Court is satisfied of the following matters:

(a) a proposed resolution has been voted on at a meeting of creditors, or of a class of creditors, of the body held under this Part;

(b) that, if the vote or votes that a particular related creditor, or particular related creditors, of the body cast on the proposed resolution had been disregarded for the purposes of determining whether or not the proposed resolution was passed, the proposed resolution:

(i) if it was in fact passed - would not have been passed; or

(ii) if in fact it was not passed - would have been passed;

or the question would have had to be decided on a casting vote;

(c) that the passing of the proposed resolution, or the failure to pass it, as the case requires:

(i) is contrary to the interests of the creditors as a whole or of that class of creditors as a whole, as the case may be; or

(ii) has prejudiced, or is reasonably likely to prejudice, the interests of the creditors who voted against the proposed resolution, or for it, as the case may be, to an extent that is unreasonable having regard to the matters in subsection (2).

(2) The matters are:

(a) the benefits resulting to the related creditor, or to some or all of the related creditors, from the resolution, or from the failure to pass the proposed resolution, as the case may be; and

(b) the nature of the relationship between the related creditor and the body, or of the respective relationships between the related creditors and the body; and

(c) any other relevant matter.

(3) The Court may make one or more of the following:

(a) if the proposed resolution was passed - an order setting aside the resolution;

(b) an order that the proposed resolution be considered and voted on at a meeting of the creditors of the body, or of that class of creditors, as the case may be, convened and held as specified in the order;

(c) an order directing that the related creditor is not, or such of the related creditors as the order specifies are not, entitled to vote on:

(i) the proposed resolution; or

(ii) a resolution to amend or vary the proposed resolution;

(d) such other orders as the Court thinks necessary.

(4) In this section:

related creditor , in relation to a Part 5.1 body, in relation to a vote, means a person who, when the vote was cast, was a related entity, and a creditor, of the body.

415B Interim order on application under section 415A

(1) If:

(a) an application under subsection 415A(1) has not yet been determined; and

(b) the Court is of the opinion that it is desirable to do so;

the Court may make such interim orders as it thinks appropriate.

(2) An interim order must be expressed to apply until the application is determined, but may be varied or discharged.

415C Order under section 415A does not affect act already done pursuant to resolution

An act done pursuant to a resolution as in force before the making, under section 415A, of an order setting aside or varying the resolution, is as valid and binding on and after the making of the order as if the order had not been made.