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 3 - Duties to prevent insolvent trading and creditor-defeating dispositions  

Subdivision C - Safe harbour from breach of duties  

SECTION 588GAAC   SAFE HARBOUR - TEMPORARY RELIEF FOR COMPANIES LOOKING FOR A RESTRUCTURING PRACTITIONER  

Safe harbour

588GAAC(1)    
Subsection 588G(2) does not apply in relation to a person and a debt incurred by a company if:

(a)    the company is eligible for temporary restructuring relief when the debt is incurred; and

(b)    the debt is incurred in the ordinary course of the company ' s business; and

(c)    the company has taken all reasonable steps to appoint a restructuring practitioner before the debt was incurred.

588GAAC(2)    
A person who wishes to rely on subsection (1) in a proceeding for, or relating to, a contravention of subsection 588G(2) bears an evidential burden in relation to that matter.

When the safe harbour does not apply

588GAAC(3)    
Subsection (1) is taken never to have applied in relation to a person and a debt in circumstances prescribed by the regulations for the purposes of this subsection.

Definitions

588GAAC(4)    
In this section:

evidential burden
, in relation to a matter, means the burden of adducing or pointing to evidence that suggests a reasonable possibility that the matter exists or does not exist.