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 2 - Voidable transactions  

Subdivision D - ASIC orders about certain voidable transactions  

SECTION 588FGAA   ASIC MAY ORDER UNDOING OF EFFECT OF CREDITOR-DEFEATING DISPOSITIONS BY COMPANY BEING WOUND UP  

Scope of this section

588FGAA(1)    
This section applies if:

(a) a company for which a liquidator has been appointed has made a creditor-defeating disposition of property; and

(b) the disposition is voidable under subsection 588FE(6B) ; and

(c) a person has received any money or property as a direct or indirect result of:

(i) the disposition; or

(ii) the person ' s acquisition of the property after the disposition.

Note: The person may receive money or property as an indirect result of acquiring (by the creditor-defeating disposition or a later transaction) the property of the company that was the subject of the creditor-defeating disposition, and later disposing of that property and receiving money or property as consideration for the later disposal.

Liquidator may request order

588FGAA(2)    
The company ' s liquidator may request ASIC to make an order under subsection (3). The request may be made only during the period beginning on the relation-back day and ending on the later of:

(a) 3 years after the relation-back day; and

(b) 12 months after the first appointment of a liquidator in relation to the winding up of the company.

ASIC must decide whether to grant the request.

Orders by ASIC

588FGAA(3)    
ASIC may, on request under subsection (2) or on its own initiative, make one or more of the following orders in writing given to the person:

(a) an order directing the person to transfer to the company property that was the subject of the disposition;

(b) an order requiring the person to pay to the company an amount that, in ASIC ' s opinion, fairly represents some or all of the benefits that the person has received (directly or indirectly) because of the disposition;

(c) an order requiring the person to transfer to the company property that, in ASIC ' s opinion, fairly represents the application of proceeds of property that was the subject of the disposition.

Note 1: Subsection (5) sets out matters ASIC must consider in deciding whether to make an order.

Note 2: Section 588FGAB provides further for the content of orders.

Limit on power to make orders

588FGAA(4)    
However, ASIC must not make an order under subsection (3) if ASIC has reason to believe that, if it were a court, section 588FG would prevent it from making a corresponding order under section 588FF .

Considerations in deciding whether to make orders

588FGAA(5)    
In deciding whether to make an order under subsection (3), ASIC must have regard to the following:

(a) the conduct of the company and its officers;

(b) the conduct of the person;

(c) the circumstances, nature and terms of the disposition;

(d) the relationship (if any) between the company and the person;

(e) any other matter ASIC considers relevant.

Revocation and amendment of orders

588FGAA(6)    
At any time, ASIC may, in writing given to the person, revoke or amend an order under subsection (3).

Note: A court may also set aside an order made under subsection (3) of this section: see section 588FGAE .