Corporations Act 2001

CHAPTER 5 - EXTERNAL ADMINISTRATION  

PART 5.3B - RESTRUCTURING OF A COMPANY  

Note: This Part does not apply to a CCIV or a sub-fund of a CCIV: see Division 4 of Part 8B.6 .

Division 2 - Restructuring  

Subdivision E - Effect on company etc. during restructuring  

SECTION 453W   RESTRUCTURING NOT TO TRIGGER LIABILITY OF DIRECTOR OR RELATIVE UNDER GUARANTEE OF COMPANY ' S LIABILITY  

453W(1)    
During the restructuring of a company:

(a)    a guarantee of a liability of the company cannot be enforced, as against:

(i) a director of the company who is a natural person; or

(ii) a spouse or relative of such a director; and

(b)    without limiting paragraph (a) , a proceeding in relation to such a guarantee cannot be begun against such a director, spouse or relative;

except with the leave of the Court and in accordance with such terms (if any) as the Court imposes.

453W(2)    
While subsection (1) prevents a person (the creditor ) from:

(a)    enforcing as against another person (the guarantor ) a guarantee of a liability of a company; or

(b)    beginning a proceeding against another person (the guarantor ) in relation to such a guarantee;

section 1323 applies in relation to the creditor and the guarantor as if:

(c)    a civil proceeding against the guarantor had begun under this Act; and

(d)    the creditor were the only person of a kind referred to in that section as an aggrieved person.

Note: Under section 1323 , the Court can make a range of orders to ensure that a person can meet the person ' s liabilities.

453W(3)    
The effect that section 1323 has because of a particular application of subsection (2) is additional to, and does not prejudice, the effect the section otherwise has.

453W(4)    
In this section:

guarantee
, in relation to a liability of a company, includes a relevant agreement (as defined in section 9 ) because of which a person other than the company has incurred, or may incur, whether jointly with the company or otherwise, a liability in respect of the liability of the company.

liability
means a debt, liability or other obligation.