Corporations Act 2001

SCHEDULE 2 - INSOLVENCY PRACTICE SCHEDULE (CORPORATIONS)  

Note: See section 600K .

PART 3 - GENERAL RULES RELATING TO EXTERNAL ADMINISTRATIONS  

Division 80 - Committees of inspection  

SECTION 80-60   OBLIGATIONS OF CREDITOR APPOINTING A MEMBER OF COMMITTEE OF INSPECTION  
Application of this section

80-60(1)    
This section applies if a creditor representing at least 10% in value of the creditors of a company appoints a person under section 80-20 as a member of a committee of inspection in relation to the external administration of the company.

80-60(2)    
The creditor must not directly or indirectly become the purchaser of any part of the property of the company.

Exceptions

80-60(3)    
Subsection (2) does not apply if the creditors resolve otherwise.

80-60(4)    
The creditor is not entitled to vote on the resolution referred to in subsection (3).

80-60(5)    
Subsection (2) does not apply to the extent that:

(a) another provision of this Act, or of another law, requires or permits the creditor to purchase the property; or

(b) the Court gives leave to the creditor to purchase the property.

Offence

80-60(6)    
A person commits an offence of strict liability if:

(a) the person is subject to a requirement under subsection (2); and

(b) the person fails to comply with the requirement.

Penalty: 50 penalty units.

Note: A defendant bears an evidential burden in relation to the matters in subsections (3) and (5) (see subsection 13.3(3) of the Criminal Code ).

Effect of contravention of this section

80-60(7)    
A transaction or any other arrangement entered into in contravention of this section may be set aside by the Court.