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 588FF   COURTS MAY MAKE ORDERS ABOUT VOIDABLE TRANSACTIONS  

588FF(1)   [Powers of court]  

Where, on the application of a company's liquidator, a court is satisfied that a transaction of the company is voidable because of section 588FE, the court may make one or more of the following orders:


(a) an order directing a person to pay to the company an amount equal to some or all of the money that the company has paid under the transaction;


(b) an order directing a person to transfer to the company property that the company has transferred under the transaction;


(c) an order requiring a person to pay to the company an amount that, in the court's opinion, fairly represents some or all of the benefits that the person has received because of the transaction;


(d) an order requiring a person to transfer to the company property that, in the court's opinion, fairly represents the application of either or both of the following:


(i) money that the company has paid under the transaction;

(ii) proceeds of property that the company has transferred under the transaction;


(e) an order releasing or discharging, wholly or partly, a debt incurred, or a security or guarantee given, by the company under or in connection with the transaction;


(f) if the transaction is an unfair loan and such a debt, security or guarantee has been assigned - an order directing a person to indemnify the company in respect of some or all of its liability to the assignee;


(g) an order providing for the extent to which, and the terms on which, a debt that arose under, or was released or discharged to any extent by or under, the transaction may be proved in a winding up of the company;


(h) an order declaring an agreement constituting, forming part of, or relating to, the transaction, or specified provisions of such an agreement, to have been void at and after the time when the agreement was made, or at and after a specified later time;


(i) an order varying such an agreement as specified in the order and, if the Court thinks fit, declaring the agreement to have had effect, as so varied, at and after the time when the agreement was made, or at and after a specified later time;


(j) an order declaring such an agreement, or specified provisions of such an agreement, to be unenforceable.

588FF(2)   [Limitation]  

Nothing in subsection (1) limits the generality of anything else in it.

588FF(3)   [Time limit on application]  

An application under subsection (1) may only be made:


(a) during the period beginning on the relation-back day and ending:


(i) 3 years after the relation-back day; or

(ii) 12 months after the first appointment of a liquidator in relation to the winding up of the company;
whichever is the later; or


(b) within such longer period as the Court orders on an application under this paragraph made by the liquidator during the paragraph (a) period.

588FF(4)   [Unreasonable director-related transaction]  

If the transaction is a voidable transaction solely because it is an unreasonable director-related transaction, the court may make orders under subsection (1) only for the purpose of recovering for the benefit of the creditors of the company the difference between:


(a) the total value of the benefits provided by the company under the transaction; and


(b) the value (if any) that it may be expected that a reasonable person in the company's circumstances would have provided having regard to the matters referred to in paragraph 588FDA(1)(c).


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