Bankruptcy Legislation Amendment Act 2002 (131 of 2002)

Schedule 1   Amendments

Part 1   Amendments

Bankruptcy Act 1966

178   After section 240

Insert:

240A Variation of composition

Variation by special resolution of creditors

(1) The creditors, with the written consent of the debtor, may vary a composition by special resolution at a meeting called for the purpose.

Variation by trustee

(2) The trustee, with the written consent of the debtor, may, in writing, propose a variation of a composition.

(3) The trustee must give notice of the proposed variation to all the creditors who would be entitled under section 64A (as that section applies in accordance with section 223A) to receive notice of a meeting of creditors.

(4) The notice must:

(a) include a statement of the reasons for the variation and the likely impact it will have on creditors (if it takes effect); and

(b) specify a date (at least 14 days after the notice is given) from which it is proposed that the variation will take effect; and

(c) state that any creditor may, by written notice to the trustee at least 2 days before the specified date, object to the variation taking effect without there being a meeting of creditors.

(5) If no creditor lodges a written notice of objection with the trustee at least 2 days before the specified date, then the proposed variation takes effect on the date specified in the notice.

(6) A certificate signed by the trustee stating any matter relating to a proposed variation under subsection (2) is prima facie evidence of the matter.

240B Termination of composition by trustee

(1) The trustee may, in writing, propose the termination of a composition if the trustee is satisfied that the debtor is in default.

(2) The trustee must give notice of the proposed termination to all the creditors who would be entitled under section 64A (as that section applies in accordance with section 223A) to receive notice of a meeting of creditors.

(3) The notice must:

(a) include a statement of the reasons for the termination and the likely impact it will have on creditors (if it takes effect); and

(b) specify a date (at least 14 days after the notice is given) from which it is proposed that the termination will take effect; and

(c) state that any creditor may, by written notice to the trustee at least 2 days before the specified date, object to the termination taking effect without there being a meeting of creditors.

(4) If:

(a) the debtor is in default; and

(b) no creditor lodges a written notice of objection with the trustee at least 2 days before the specified date;

then the proposed termination takes effect on the date specified in the notice.

(5) For the purposes of this section, the debtor is in default if, and only if:

(a) the debtor has failed to carry out or comply with a term of the composition; or

(b) if the debtor has died, the debtor or the person administering the estate of the debtor has failed to carry out or comply with a term of the composition.

(6) A certificate signed by the trustee stating any matter relating to a proposed termination under this section is prima facie evidence of the matter.