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

Schedule 1   Improving outcomes for creditors

Part 3   Streamlining external administration

Corporations Act 2001

88   After section 468

Insert:

468A Effect of winding up on company's members

Transfer of shares

(1) A transfer of shares in a company that is made after the commencement of the winding up by the Court is void except if:

(a) both:

(i) the liquidator gives written consent to the transfer; and

(ii) that consent is unconditional; or

(b) all of the following subparagraphs apply:

(i) the liquidator gives written consent to the transfer;

(ii) that consent is subject to one or more specified conditions;

(iii) those conditions have been satisfied; or

(c) the Court makes an order under subsection (4) authorising the transfer.

(2) The liquidator may only give consent under paragraph (1)(a) or (b) if he or she is satisfied that the transfer is in the best interests of the company's creditors as a whole.

(3) If the liquidator refuses to give consent under paragraph (1)(a) or (b) to a transfer of shares in the company:

(a) the prospective transferor; or

(b) the prospective transferee; or

(c) a creditor of the company;

may apply to the Court for an order authorising the transfer.

(4) If the Court is satisfied, on an application under subsection (3), that the transfer is in the best interests of the company's creditors as a whole, the Court may, by order, authorise the transfer.

(5) If the liquidator gives consent under paragraph (1)(b) to a transfer of shares in the company:

(a) the prospective transferor; or

(b) the prospective transferee; or

(c) a creditor of the company;

may apply to the Court for an order setting aside any or all of the conditions to which the consent is subject.

(6) If the Court is satisfied, on an application under subsection (5), that any or all of the conditions covered by the application are not in the best interests of the company's creditors as a whole, the Court may, by order, set aside any or all of the conditions.

(7) The liquidator is entitled to be heard in a proceeding before the Court in relation to an application under subsection (3) or (5).

Alteration in the status of members

(8) An alteration in the status of members of a company that is made after the commencement of the winding up by the Court is void except if:

(a) both:

(i) the liquidator gives written consent to the alteration; and

(ii) that consent is unconditional; or

(b) all of the following subparagraphs apply:

(i) the liquidator gives written consent to the alteration;

(ii) that consent is subject to one or more specified conditions;

(iii) those conditions have been satisfied; or

(c) the Court makes an order under subsection (12) authorising the alteration.

(9) The liquidator may only give consent under paragraph (8)(a) or (b) if he or she is satisfied that the alteration is in the best interests of the company's creditors as a whole.

(10) The liquidator must refuse to give consent under paragraph (8)(a) or (b) if the alteration would contravene Part 2F.2.

(11) If the liquidator refuses to give consent under paragraph (8)(a) or (b) to an alteration in the status of members of a company:

(a) a member of the company; or

(b) a creditor of the company;

may apply to the Court for an order authorising the alteration.

(12) If the Court is satisfied, on an application under subsection (11), that:

(a) the alteration is in the best interests of the company's creditors as a whole; and

(b) the alteration does not contravene Part 2F.2;

the Court may, by order, authorise the alteration.

(13) If the liquidator gives consent under paragraph (8)(b) to an alteration in the status of members of a company:

(a) a member of the company; or

(b) a creditor of the company;

may apply to the Court for an order setting aside any or all of the conditions to which the consent is subject.

(14) If the Court is satisfied, on an application under subsection (13), that any or all of the conditions covered by the application are not in the best interests of the company's creditors as a whole, the Court may, by order, set aside any or all of the conditions.

(15) The liquidator is entitled to be heard in a proceeding before the Court in relation to an application under subsection (11) or (13).