Commonwealth Consolidated Regulations

CORPORATIONS REGULATIONS 2001 - REG 5.3B.39

  (1)   The restructuring practitioner for a company's restructuring plan 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 of the Act).

  (2)   Subregulation (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.

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

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

  (5)   The Court may only make an order under subregulation   (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.

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

  (7)   If:

  (a)   a company has made a restructuring plan that has not terminated; and

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

  (c)   the restructuring practitioner disposes of the property;

the disposal extinguishes the security interest.

  (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.