THE CORPORATIONS LAW

CHAPTER 5 - EXTERNAL ADMINISTRATION

PART 5.5 - VOLUNTARY WINDING UP

Division 4 - Voluntary winding up generally

SECTION 507   POWER OF LIQUIDATOR TO ACCEPT SHARES ETC AS CONSIDERATION FOR SALE OF PROPERTY OF COMPANY  

507(1)  [Application of section]  

This section applies where it is proposed to transfer or sell to a body corporate the whole or a part of the business or property of a company.

507(2)  [Special resolution of company]  

The liquidator of the company may, with the sanction of a special resolution of the company conferring on the liquidator either a general authority or an authority in respect of a particular arrangement, enter into an arrangement under which, in compensation or part compensation for the transfer or sale:

(a)  the liquidator is to receive shares, debentures, policies or other like interests in the body corporate for distribution among the members of the company; or

(b)  the members of the company may, instead of, or as well as, receiving cash, shares, debentures, policies or other like interests in the body corporate, participate in the profits of, or receive any other benefit from, the body corporate.

507(3)  [Sale etc binding]  

A transfer, sale or arrangement under this section is binding on the members of the company.

507(4)  [Rights of dissenting member]  

If a member of the company who did not vote in favour of a special resolution expresses dissent from the resolution in writing addressed to the liquidator and left at the office of the liquidator within 7 days after the passing of the resolution, the member may require the liquidator either to abstain from carrying the resolution into effect or to purchase the member's interest at a price to be determined by agreement or by arbitration under this section.

507(5)  [Purchase of member's interest]  

If the liquidator elects to purchase the member's interest, the purchase money shall be paid before the company is deregistered and be raised by the liquidator in such manner as is determined by special resolution.

507(6)  [Validity of special resolution]  

A special resolution is not invalid for the purposes of this section because it is passed before, or concurrently with, a resolution for voluntary winding up or for appointing liquidators but, if an order for winding up the company by the Court is made within 1 year after the passing of the resolution, the resolution is not valid unless sanctioned by the Court.

507(7)  [Law applicable to arbitration]  

For the purposes of an arbitration under this section, the law of this jurisdiction relating to commercial arbitration applies as if there were a submission for reference to 2 arbitrators, one to be appointed by each party.

507(8)  [Appointment of arbitrator]  

The appointment of an arbitrator may be made in writing signed by:

(a)  if there is only one liquidator - the liquidator; or

(b)  if there is more than one liquidator - any 2 or more of the liquidators.

507(9)  [Court directions]  

The Court may give any directions necessary for the initiation and conduct of the arbitration and any such direction is binding on the parties.

507(10)  [Creditors' voluntary winding up]  

In the case of a creditors' voluntary winding up, the powers of the liquidator under this section shall not be exercised except with the approval of the Court or the committee of inspection.

507(11)  [Lodgment of special resolution]  

The company must lodge a copy of a special resolution referred to in subsection (2) or (5) with ASIC within 14 days after the resolution is passed.