THE CORPORATIONS LAW

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)  [Sec 588FF]  

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).