Schedule 13 COVID-19 business debt hibernation

s 395A

Schedule 13: inserted, on 16 May 2020, by section 3 of the COVID-19 Response (Further Management Measures) Legislation Act 2020 (2020 No 13).

Contents

1Purposes
2Overview of schedule
3Application of schedule
4Interpretation
5Board of entity may agree to entity entering into BDH
6Entity may enter BDH by delivering notice to Registrar
7Copy of notice must be sent to creditors
8Restriction on entering into BDH more than once
9Entity must develop proposal for arrangement and send notice to creditors
10Contents of notice
11Creditors’ meeting is voluntary
12Effect of irregularity or failure
13Protection period
14When protections start to apply (and entity enters into BDH)
15Protections generally apply for 1 month and additional 6 months if creditors approve arrangement
16Protections cease to apply if conditions not complied with
17Protections cease to apply if entity fails to send new certificates on request
18Protections cease if entity subsequently becomes subject to compromise or enters voluntary administration, receivership, or liquidation
19Entity may decide to come out of BDH early
20Protections subject to approval
21Protections do not apply to general security holders
22Protections do not apply to excluded debts
23When arrangement is approved
24Approval needs majority in number and value of creditors
25Duty to receive and count votes
26Amounts must not be determined by reference to class of creditor
27Board of entity must prepare certificate of result of vote
28Board must ensure creditors and Registrar are notified of result of vote
29Arrangement is binding
30Restriction on effect of arrangement
31Variation of arrangement
32Related creditor’s vote to be disregarded unless court orders otherwise
33Creditor’s vote disregarded if entity considers creditor is related creditor
34Further powers where court orders creditor’s vote be taken into account
35Power of court where outcome of voting determined by related creditor
36Powers of court
37Court may order that creditor is not bound
38Charge unenforceable
39Owner or lessor must not recover property used by entity
40Proceeding must not be begun or continued
41Entity not liable in damages for refusing consent
42Enforcement process halted
43Duties of court officer in relation to entity’s property
44Certain guarantees may not be enforced during protection period
45If enforcement of charges begins before entity enters into BDH
46Charge over perishable property
47Court may limit powers of secured creditor, etc, in relation to property subject to charge
48Giving notice under security agreement
49If recovery of property begins before protection period
50Recovering perishable property
51Court may limit powers of receiver, etc, in relation to property used by entity
52Giving notice under agreement about property
53When provisions do not apply
54Part applies only if creditors’ meeting is held
55Methods of holding meetings
56Adjournment of meeting
57Chairperson
58Quorum
59Proxies
60Postal or electronic votes
61Proposed arrangement may not be varied at meeting
62Bodies corporate may act by representatives
63Other proceedings
64Effect of irregularity or defect
65How notices or documents must be sent to creditors
66Effect of actions under schedule
67Right for new advance of money or credit may not be enforced
68Burden of proof
69Registrar must register or publicly notify information about notices
70Schedule does not prevent subsequent compromise, voluntary administration, receivership, or liquidation
71Effect of arrangement in liquidation of entity
72Crown not prevented from voting to approve arrangement
73Schedule applies despite anything contrary in Construction Contracts Act 2002
74Arrangement treated as instalment arrangement under Tax Administration Act 1994