CORPORATIONS ACT 2001

SCHEDULE 2 - INSOLVENCY PRACTICE SCHEDULE (CORPORATIONS)  

Note: See section 600K .

PART 3 - GENERAL RULES RELATING TO EXTERNAL ADMINISTRATIONS  

Division 80 - Committees of inspection  

CLAUSE 80-1   SIMPLIFIED OUTLINE OF THIS DIVISION  


Creditors of a company under external administration may decide that there is to be a committee of inspection to monitor the administration and to give assistance to the external administrator.

Appointing the committee

Each of the following have rights to appoint members to the committee (and to remove those members and fill the vacancy):

  • (a) the creditors by resolution;
  • (b) a single creditor who is owed, or a group of creditors who together are owed, a large amount;
  • (c) a single employee who is owed, or a group of employees who together are owed, a large amount.
  • Once a person exercises a right in one capacity to appoint a member, the person cannot exercise a right in another capacity to do so. A person can exercise the right in a particular capacity to appoint only one person (unless the person is filling a vacancy in that appointment).

    If a company is in a related group of companies (called a pooled group), creditors of all the companies may decide together that there is to be a committee of inspection for the group and appoint members of the committee.

    Procedures and powers

    This Division also deals with the procedures and powers of committees of inspection (including requesting information, documents and reports from the external administrator and obtaining specialist advice).

    An external administrator of a company must have regard to directions of the committee but is not obliged to comply.

    Review

    The Court may inquire into and make orders about the conduct of committees of inspection.


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