A T O home
Legal Database
Search   
for 
 
Access the database 
Browse database
Searches  
View last document
Quick access 
View legislation
View a document
Email Cross Reference Material Previous/Next Section Contents Previous/Next Result
Printable version
Printable
version

CORPORATIONS ACT 2001

CHAPTER 5 - EXTERNAL ADMINISTRATION  

PART 5.6 - WINDING UP GENERALLY  

Division 8 - Pooling    View history reference

Subdivision A - Pooling determinations    View history reference

SECTION 571  POOLING DETERMINATION  

 View history reference

571(1)  Making of pooling determination.  


If the following conditions are satisfied in relation to a group of 2 or more companies:


(a) each company in the group is being wound up;


(b) any of the following subparagraphs applies:


(i) each company in the group is a related body corporate of each other company in the group;

(ii) apart from this section, the companies in the group are jointly liable for one or more debts or claims;

(iii) the companies in the group jointly own or operate particular property that is or was used, or for use, in connection with a business, a scheme, or an undertaking, carried on jointly by the companies in the group;

(iv) one or more companies in the group own particular property that is or was used, or for use, by any or all of the companies in the group in connection with a business, a scheme, or an undertaking, carried on jointly by the companies in the group;

the liquidator or liquidators of the companies may, by writing:


(c) determine that the group is a pooled group for the purposes of this section; and


(d) if the liquidator or liquidators consider that it is just and equitable, as between the various creditors of the companies in the group, to do so - determine that any or all of the following provisions:


(i) subsection (2);

(ii) subsection (3);

(iii) subsection (4);

(iv) subsection (5);

(v) subsection (6);

(vi) subsection (7);
are modified, as set out in the determination, in their application to the companies in the group.

Note 1: Section 9 provides that pooling determination means a determination under subsection (1) of this section.

Note 2: A pooling determination comes into force when it is approved by the eligible unsecured creditors of each of the companies in the group - see section 578.

571(2)  Consequences of pooling determination.  


If a determination under paragraph (1)(c) comes into force in relation to a group of 2 or more companies:


(a) each company in the group is taken to be jointly and severally liable for each debt payable by, and each claim against, each other company in the group; and


(b) each debt payable by a company or companies in the group to any other company or companies in the group is extinguished; and


(c) each claim that a company or companies in the group has against any other company or companies in the group is extinguished.

571(3)  

Subsection (2) applies to a debt or claim:


(a) whether present or future; and


(b) whether certain or contingent; and


(c) whether ascertained or sounding only in damages.

571(4)  

Subsection (2) does not apply to a debt payable by, or a claim against, a company in the group unless the debt or claim is admissible to proof against the company.

571(5)  

If a determination under paragraph (1)(c) comes into force in relation to a group of 2 or more companies, the order of priority applicable under sections 556, 560 and 561 is not altered for a company in the group.

571(6)  

If:


(a) a determination under paragraph (1)(c) comes into force in relation to a group of 2 or more companies; and


(b) a secured creditor of a company in the group surrenders the relevant security interest to the liquidator of the company for the benefit of creditors of the companies in the group generally;
 View history reference

the debt may be recovered as a debt that is jointly and severally payable by the companies in the group.

571(7)  

If:


(a) a determination under paragraph (1)(c) comes into force in relation to a group of 2 or more companies; and


(b) a secured creditor of a company in the group realises the security interest;
 View history reference

so much of the debt as remains after deducting the net amount realised may be recovered as a debt that is jointly and severally payable by the companies in the group.

571(8)  

The following provisions have effect subject to any modifications under paragraph (1)(d):


(a) subsection (2);


(b) subsection (3);


(c) subsection (4);


(d) subsection (5);


(e) subsection (6);


(f) subsection (7).

571(9)  

Subsection (2) does not apply in relation to a secured creditor unless the relevant debt is payable by a company or companies in the group to any other company or companies in the group.

571(10)  

If:


(a) a pooling determination comes into force in relation to a group of 2 or more companies; and


(b) there are one or more eligible employee creditors of a company in the group;

those eligible employee creditors are entitled to a priority at least equal to what they would have been entitled if the determination had not been made.

571(11)  Section 477 not limited.  


This section does not limit section 477.


 



This information is provided by CCH Australia Limited. View the disclaimer and notice of copyright.
Top of page
More information on page