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 2A - Vesting of PPSA security interests if not continuously perfected  

SECTION 588FO   CERTAIN LESSORS, BAILORS AND CONSIGNORS ENTITLED TO DAMAGES  

Scope

588FO(1)    
This section applies if either of the following PPSA security interests is vested in a company under section 588FL :

(a) a PPSA security interest of a consignor under a commercial consignment;

(b) a PPSA security interest of a lessor or bailor under a PPS lease.

Entitlement to damages and compensation

588FO(2)    
The consignor, lessor or bailor:

(a) is taken to have suffered damage immediately before the PPSA security interest was vested in the company; and

(b) may recover an amount of compensation from the company equal to the greater of the following amounts:

(i) the amount determined in accordance with the consignment, lease or bailment;

(ii) the sum of the market value of the consigned, leased or bailed property immediately before the critical time that applies under section 588FL , and the amount of any other damage or loss resulting from the termination of the consignment, lease or bailment.

Note: The consignor, lessor or bailor may be able to prove the amount of compensation in proceedings related to the winding up of the company.