Corporations Amendment (Insolvency) Act 2007 (132 of 2007)

Schedule 1   Improving outcomes for creditors

Part 2   Better informing creditor decisions

Corporations Act 2001

36   After section 506

Insert:

506A Declarations by liquidator - relevant relationships

Scope

(1) This section applies if the liquidator of a company is required to convene a meeting under section 497.

Declaration of relevant relationships

(2) Before convening the meeting, the liquidator must make a declaration of relevant relationships.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).

Notification of creditors

(3) The liquidator must:

(a) give a copy of each declaration under subsection (2) to as many of the company's creditors as reasonably practicable; and

(b) do so at the same time as the liquidator gives those creditors notice of the meeting.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).

(4) The liquidator must table a copy of each declaration under subsection (2) at the meeting.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).

Updating of declaration

(5) If:

(a) at a particular time, the liquidator makes a declaration of relevant relationships under subsection (2) or this subsection; and

(b) at a later time:

(i) the declaration has become out-of-date; or

(ii) the liquidator becomes aware of an error in the declaration;

the liquidator must, as soon as practicable, make a replacement declaration of relevant relationships.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).

(6) The liquidator must table a copy of a replacement declaration under subsection (4):

(a) if:

(i) there is a committee of inspection; and

(ii) the next meeting of the committee of inspection occurs before the next meeting of the company's creditors;

at the next meeting of the committee of inspection; or

(b) in any other case - at the next meeting of the company's creditors.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).

Defence

(7) In a prosecution for an offence constituted by a failure to include a particular matter in a declaration under this section, it is a defence if the defendant proves that:

(a) the defendant made reasonable enquiries; and

(b) after making these enquiries, the defendant had no reasonable grounds for believing that the matter should have been included in the declaration.