Corporations Act 2001
[ CCH Note: Pt 5.7B will be amended by No 8 of 2022, s 3, Sch 2, by inserting the note, (effective 1 July 2022). The note will read:
A disposition of property of a company is a creditor-defeating disposition if:
(a) the consideration payable to the company for the disposition was less than the lesser of the following at the time the relevant agreement (as defined in section 9 ) for the disposition was made or, if there was no such agreement, at the time of the disposition:
(i) the market value of the property;
(ii) the best price that was reasonably obtainable for the property, having regard to the circumstances existing at that time; and
(b) the disposition has the effect of:
(i) preventing the property from becoming available for the benefit of the company ' s creditors in the winding-up of the company; or
Extensions of concept of disposition 588FDB(2)
(ii) hindering, or significantly delaying, the process of making the property available for the benefit of the company ' s creditors in the winding-up of the company.
For the purposes of this section and provisions of this Act that refer to a creditor-defeating disposition, if a company does something that results in another person becoming the owner of property that did not previously exist, the company is taken to have made a disposition of the property. 588FDB(3)
For the purposes of this section and provisions of this Act that refer to a creditor-defeating disposition, if:
(a) a company makes a disposition of property to another person; and
(b) the other person gives some or all of the consideration for the disposition to a person (the third party ) other than the company;
the company is taken to have made a disposition of the property constituting so much of the consideration as was given to the third party.