Commonwealth Numbered Acts

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CORPORATIONS ACT 2001 No. 50, 2001 - SECT 588M

Recovery of compensation for loss resulting from insolvent trading

(1) This section applies where:

(a)
a person (in this section called the director ) has contravened subsection 588G(2) or (3) in relation to the incurring of a debt by a company; and

(b)
the person (in this section called the creditor ) to whom the debt is owed has suffered loss or damage in relation to the debt because of the company's insolvency; and

(c)
the debt was wholly or partly unsecured when the loss or damage was suffered; and

(d)
the company is being wound up;

whether or not:

(e)
the director has been convicted of an offence in relation to the contravention; or

(f)
a civil penalty order has been made against the director in relation to the contravention.

(2) The company's liquidator may recover from the director, as a debt due to the company, an amount equal to the amount of the loss or damage. (3) The creditor may, as provided in Subdivision B but not otherwise, recover from the director, as a debt due to the creditor, an amount equal to the amount of the loss or damage. (4) Proceedings under this section may only be begun within 6 years after the beginning of the winding up.



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