Most Read Contributor in New Zealand, September 2016
High Court has confirmed its broad power to bypass the strict
legislative requirements that otherwise govern voluntary
administrations. Section 239ADO(1) of the Companies Act allows the
Court to make any order that it thinks appropriate about how the
voluntary administration provisions of the Companies Act are to
operate in relation to a particular company.
Significantly, the Court has confirmed that it may use the
section to override the legislation in relation to a particular
The creditors of Hartland Construction Limited initially applied
for orders putting Hartland into liquidation. The directors
subsequently sought to appoint a voluntary administrator. However,
they were outside of the 10-working day time limit to do so. To get
around this stumbling block, the Court relied on its broad power
under section 239ADO to grant leave to appoint an administrator.
The Court considered that voluntary administration would be in the
best interests of the company and its creditors, by improving the
company's chances of continued existence, or providing a better
outcome than liquidation.
The Court's decision emphasises that the Court can and will
go beyond strict legislative restrictions on voluntary
administration if it is in the best interests of creditors to do
so. Voluntary administration is an insolvency process not often
used in New Zealand (unlike Australia), and it is encouraging to
see the Courts taking a flexible approach that promotes its
The information in this article is for informative purposes
only and should not be relied on as legal advice. Please contact
Chapman Tripp for advice tailored to your situation.
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As a demonstration of India's combined political will, the much awaited and debated Insolvency and Bankruptcy Code, 2016 was passed by the Upper House of the Parliament on 11 May 2016 (shortly after being passed by the Lower House on 5 May 2016).
The Code envisages that the insolvency resolution processes will be conducted by insolvency professionals.
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