CORPORATIONS ACT 2001

CHAPTER 5 - EXTERNAL ADMINISTRATION  

PART 5.3A - ADMINISTRATION OF A COMPANY'S AFFAIRS WITH A VIEW TO EXECUTING A DEED OF COMPANY ARRANGEMENT  

Division 8 - Powers of administrator  

SECTION 442C   WHEN ADMINISTRATOR MAY DISPOSE OF ENCUMBERED PROPERTY  

442C(1)  
The administrator of a company under administration or of a deed of company arrangement must not dispose of:


(a) property of the company that is subject to a security interest; or


(b) property (other than PPSA retention of title property) that is used or occupied by, or is in the possession of, the company but of which someone else is the owner or lessor.

Note: PPSA retention of title property is subject to a PPSA security interest, and so is covered by paragraph (a) (see definition of PPSA retention of title property in section 51F).

442C(2)  
Subsection (1) does not prevent a disposal:


(a) in the ordinary course of the company ' s business; or


(b) with the written consent of the secured party, owner or lessor, as the case may be; or


(c) with the leave of the Court.

442C(3)  


The Court may only give leave under paragraph (2)(c) if satisfied that arrangements have been made to protect adequately the interests of the secured party, owner or lessor, as the case may be.

442C(4)  


If the administrator proposes to dispose of property under paragraph (2)(a), the Court may, by order, direct the administrator not to carry out that proposal.

442C(5)  


The Court may only make an order under subsection (4) on the application of:


(a) if paragraph (1)(a) applies - the secured party; or


(b) if paragraph (1)(b) applies - the owner or lessor, as the case may be.

442C(6)  


The Court may only make an order under subsection (4) if it is not satisfied that arrangements have been made to protect adequately the interests of the applicant for the order.

442C(7)  


If:


(a) a company is under administration or is subject to a deed of company arrangement; and


(b) property of the company is subject to a security interest; and


(c) the administrator disposes of the property;

the disposal extinguishes the security interest.

442C(8)  


For the purposes of paragraph (2)(a), if:


(a) property is used or occupied by, or is in the possession of, a company; and


(b) another person is the owner of the property; and


(c) either:


(i) the property is PPSA retention of title property; or

(ii) the property is subject to a retention of title clause under a contract; and


(d) the owner demands the return of the property;

a disposal of the property that occurs after the demand is made does not mean that the disposal is not in the ordinary course of the company ' s business.


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