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CORPORATIONS ACT 2001

CHAPTER 5 - EXTERNAL ADMINISTRATION  

PART 5.7B - RECOVERING PROPERTY OR COMPENSATION FOR THE BENEFIT OF CREDITORS OF INSOLVENT COMPANY  

Division 2 - Voidable transactions  

SECTION 588FH  LIQUIDATOR MAY RECOVER FROM RELATED ENTITY BENEFIT RESULTING FROM INSOLVENT TRANSACTION  

588FH(1)  [Insolvent transaction]  


This section applies where a company is being wound up and a transaction of the company:


(a) is an insolvent transaction of the company; and


(b) is voidable under section 588FE; and


(c) has had the effect of discharging, to the extent of a particular amount, a liability (whether under a guarantee or otherwise and whether contingent or otherwise) of a related entity of the company.

588FH(2)  [Recovery proceedings by liquidator]  


The company's liquidator may recover from the related entity, as a debt due to the company, an amount equal to the amount referred to in paragraph (1)(c).

588FH(3)  [Voidable preference orders]  


In deciding what orders (if any) to make under section 588FF on an application relating to the transaction, a court must take into account any amount recovered under subsection (2) of this section.

588FH(4)  [Rights of related entity]  


If the liquidator recovers an amount under subsection (2) from the related entity, the related entity has the same rights:


(a) whether by way of indemnity, subrogation, contribution or otherwise; and


(b) against the company or anyone else;

as if the related entity had paid the amount in discharging, to the extent of that amount, the liability referred to in paragraph (1)(c).

 



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