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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 4 - Director liable to compensate company  

Subdivision A - Proceedings against director  

SECTION 588M  RECOVERY OF COMPENSATION FOR LOSS RESULTING FROM INSOLVENT TRADING  

588M(1)  [Application]  


This section applies where:


(a) a person (in this section called the director) has contravened subsection 588G(2) or (3) in relation to the incurring of a debt by a company; and


(b) the person (in this section called the creditor) to whom the debt is owed has suffered loss or damage in relation to the debt because of the company's insolvency; and


(c) the debt was wholly or partly unsecured when the loss or damage was suffered; and


(d) the company is being wound up;

whether or not:


(e) the director has been convicted of an offence in relation to the contravention; or


(f) a civil penalty order has been made against the director in relation to the contravention.

588M(2)  [Liquidator may recover from director]  


The company's liquidator may recover from the director, as a debt due to the company, an amount equal to the amount of the loss or damage.

588M(3)  [Creditor's power to recover]  


The creditor may, as provided in Subdivision B but not otherwise, recover from the director, as a debt due to the creditor, an amount equal to the amount of the loss or damage.

588M(4)  [Time limit]  


Proceedings under this section may only be begun within 6 years after the beginning of the winding up.

 



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