Commonwealth Consolidated Acts Commonwealth Consolidated ActsWhen is a company eligible for temporary restructuring relief?
(1) A compan y is eligible for temporary restructuring relief if:
(a) before the end of the restructuring relief period, the directors of the company:
(i) make a declaration in writing that sets out the matters mentioned in paragraphs (b), (c) and (d) and, if there is a prescribed form for the declaration, is in the prescribed form; and
(ii) publish notice of the declaration in the prescribed manner; and
(b) there are reasonable grounds to believe that:
(i) the company is insolvent, or is likely to become insolvent before the declaration under subparagraph (a)(i) expires; and
(ii) the eligibility criteria for restructuring would be met in relation to the company if a restructuring practitioner were appointed on the day on which notice of the declaration under subparagraph (a)(i) is published, or on any day afterwards on which the declaration has not expired; and
(c) the board has resolved to the effect that a restructuring practitioner for the company should be appointed; and
(d) there is no:
(i) restructuring practitioner for the company; or
(ii) restructuring practitioner for a restructuring plan made by the company that has not yet terminated; or
(iii) administrator of the company; or
(iv) administrator of a deed of company arrangement executed by the company that has not yet terminated; or
(v) liquidator or provisional liquidator of the company; and
(e) the declaration under subparagraph (a)(i) has not expired; and
(f) the company has not otherwise ceased to be eligible for temporary restructuring relief for any reason; and
(g) the company has not previously been eligible for temporary restructuring relief that has ceased:
(i) because a previous declaration under subparagraph (a)(i) has expired; or
(ii) for any other reason.
(2) A declaration under subparagraph (1)(a)(i) in relation to a company expires:
(a) 3 months after notice of the declaration is first published in the prescribed manner (the initial relief period ); or
(b) a further one month after the initial relief period if:
(i) paragraphs (1)(b), (c) and (d) continue to be satisfied in relation to the company; and
(ii) the directors of the company have taken all reasonable steps to appoint a restructuring practitioner but have been unable to do so; and
(iii) the directors of the company make a further declaration under subsection (3), and publish notice of that declaration in the prescribed manner; and
(iv) notice of the further declaration is published no later than 2 weeks before the end of the initial relief period.
(3) A declaration by the directors of a company under this subsection must:
(a) state that paragraphs (1)(b), (c) and (d) continue to be satisfied in relation to the company; and
(b) set out:
(i) the steps that the company has taken to appoint a restructuring practitioner; and
(ii) the steps that the company intends to take to appoint a restructuring practitioner before the declaration under subparagraph (1)(a)(i) expires, if extended under paragraph (2)(b); and
(c) be in writing; and
(d) if there is a prescribed form for the declaration--be in the prescribed form.
Giving ASIC copies of declarations under this section
(4) If the directors of a company publish notice of a declaration as mentioned in subparagraph (1)(a)(ii) or (2)(b)(iii), they must give ASIC a copy of the declaration no later than 5 business days after doing so.
Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).
When does a company cease to be eligible for temporary restructuring relief?
(5) A company ceases to be eligible for temporary restructuring relief if:
(a) the declaration under subparagraph (1)(a)(i) under which the company was eligible for temporary restructuring relief expires; or
(b) the directors of the company fail to comply with subsection (4); or
(c) a small business restructuring practitioner for the company is appointed under section 453B; or
(d) an administrator of the company is appointed under section 436A, 436B or 436C; or
(e) a liquidator, or provisional liquidator, is appointed to wind up the company; or
(f) the company publishes notice under subsection 458F(1) or (2) that the company is not, or is not to be treated as, eligible for temporary restructuring relief; or
(g) the Court orders under section 458G that the company is not eligible for temporary restructuring relief.