THE CORPORATIONS LAW

CHAPTER 5 - EXTERNAL ADMINISTRATION

PART 5.6 - WINDING UP GENERALLY

Division 7 - Effect on certain transactions

SECTION 567   LIQUIDATOR'S RIGHT TO RECOVER IN RESPECT OF CERTAIN TRANSACTIONS  

567(1)  [Sales to company at overvalue]  

Where any property, business or undertaking has been acquired by a company for a cash consideration before the commencement of Part 5.7B and within 4 years before the relation-back day in relation to a winding up of the company:

(a)  from a promoter of the company or a spouse of such a promoter, or from a relative of such a promoter or spouse;

(b)  from a person who was, at the time of the acquisition, a director of the company, from a spouse of such a director, or from a relative of such a person or spouse;

(c)  from a body corporate that was, at the time of the acquisition, related to the company; or

(d)  from a person who was, at the time of the acquisition, a director of a body corporate that was related to the company, from a spouse of such a person, or from a relative of such a person or spouse;

the liquidator may recover from the person or body corporate from which the property, business or undertaking was acquired any amount by which the cash consideration for the acquisition exceeded the value of the property, business or undertaking at the time of its acquisition.

567(2)  [Sales by company at undervalue]  

Where any property, business or undertaking has been sold by a company for a cash consideration before the commencement of Part 5.7B and within 4 years before the relation-back day in relation to a winding up of the company:

(a)  to a promoter of the company or a spouse of such a promoter, or to a relative of such a promoter or spouse;

(b)  to a person who was, at the time of the sale, a director of the company, to a spouse of such a director, or to a relative of such a person or spouse;

(c)  to a body corporate that was, at the time of the sale, related to the company; or

(d)  to a person who was, at the time of the sale, a director of a body corporate that was related to the company, to a spouse of such a director, or to a relative of such a person or spouse;

the liquidator may recover from the person or body corporate to which the property, business or undertaking was sold any amount by which the value of the property, business or undertaking at the time of the sale exceeded the cash consideration.

567(3)  [Value]  

For the purposes of this section, the value of the property, business or undertaking includes the value of any goodwill, profits or gain that might have been made from the property, business or undertaking.

567(4)  [Cash consideration]  

In this section, ``cash consideration'' means any consideration payable otherwise than by the issue of shares in the company.

567(5)  [Preferences having effect of discharging officer from liability]  

Where:

(a)  a disposition of property is made by a company before the commencement of Part 5.7B and within 6 months before the relation-back day in relation to a winding up of the company;

(b)  the disposition of property confers a preference upon a creditor of the company; and

(c)  the disposition of property has the effect of discharging an officer of the company from a liability (whether under a guarantee or otherwise and whether contingent or otherwise);

the liquidator:

(d)  in a case to which paragraph (e) does not apply - may recover from that officer an amount equal to the value of the relevant property, as the case may be; or

(e)  where the liquidator has recovered from the creditor in respect of the disposition of the relevant property:

(i) an amount equal to part of the value of the relevant property; or

(ii) part of the relevant property;

may recover from that officer an amount equal to the amount by which the value of the relevant property exceeds the sum of any amounts recovered as mentioned in subparagraph (i) and the amount of the value of any property recovered as mentioned in subparagraph (ii).

567(6)  [Subsequent recovery from liquidator]  

Where:

(a)  a liquidator recovers an amount of money from an officer of a company in respect of a disposition of property to a creditor as mentioned in subsection (5); and

(b)  the liquidator subsequently recovers from that creditor an amount equal to the whole or part of the value of the property disposed of;

the officer may recover from the liquidator an amount equal to the amount so recovered or the value of the property so recovered.