Section 70‑40 Report about dividends to be given - Insolvency Practice Rules (Corporations) 2016 - 70‑40 Report about dividends to be given in certain external administrations | Zoe
70‑40 Report about dividends to be given in certain external administrations
(1) This section:
(a) is made for the purposes of section 70‑50 of the Insolvency Practice Schedule (Corporations); and
(b) applies if a liquidator has been appointed in relation to a company.
(2) If the company is following the simplified liquidation process:
(a) the liquidator must provide to the creditors of the company a report containing information on the following:
(i) anything relating to the winding up of the company that has been done by the liquidator to date;
(ii) the date on which, in the liquidator’s opinion, the winding up of the company is likely to end;
(iii) the likelihood of creditors receiving a dividend before the affairs of the company are fully wound up; and
(b) the report must be provided within 3 months after the date of the liquidator’s appointment; and
(c) a copy of the report must be lodged with ASIC at the same time as it is provided to the creditors.
(3) If the company is not following the simplified liquidation process, or has ceased to follow the simplified liquidation process:
(a) the liquidator must provide to the creditors of the company a report containing information on the following:
(i) the estimated amounts of assets and liabilities of the company;
(ii) inquiries relating to the winding up of the company that have been undertaken to date;
(iii) further inquiries relating to the winding up of the company that may need to be undertaken;
(iv) what happened to the business of the company;
(v) the likelihood of creditors receiving a dividend before the affairs of the company are fully wound up;
(vi) possible recovery actions; and
(b) the report must be provided before:
(i) the end of the period of 3 months after the date of the liquidator’s appointment; or
(ii) the end of the period of 1 month after the date on which the company ceased to follow the simplified liquidation process;
whichever occurs later; and
(c) a copy of the report must be lodged with ASIC in the approved form at the same time as it is provided to the creditors.
70‑45 Reports about remuneration to be given before remuneration determinations are made
(1) This section is made for the purposes of section 70‑50 of the Insolvency Practice Schedule (Corporations).
Reporting requirements when remuneration to be determined by committee of inspection
(2) Before a remuneration determination for an external administrator of a company is made by a committee of inspection under section 60‑10 of the Insolvency Practice Schedule (Corporations), the external administrator must:
(a) prepare a report setting out such matters as will enable the committee of inspection to make an informed assessment as to whether the proposed remuneration is reasonable; and
(b) give a copy of the report to each member of the committee of inspection at the same time as the member is notified of the relevant meeting of the committee.
Reporting requirements when remuneration to be determined by creditors
(3) Before a remuneration determination for an external administrator of a company is made by resolution of the creditors under section 60‑10 of the Insolvency Practice Schedule (Corporations), the external administrator must:
(a) prepare a report setting out such matters as will enable the company’s creditors to make an informed assessment as to whether the proposed remuneration is reasonable; and
(b) give a copy of the report to each of the company’s creditors at the same time as the creditors are notified of the relevant meeting of creditors.
Reporting requirements when remuneration to be determined by company in a members’ voluntary winding up
(4) Before a remuneration determination for an external administrator of a company in a members’ voluntary winding up is made by resolution of the company under section 60‑10 of the Insolvency Practice Schedule (Corporations), the external administrator must:
(a) prepare a report setting out such matters as will enable the members to make an informed assessment as to whether the proposed remuneration is reasonable; and
(b) give a copy of the report to each of the members at the same time as the members are notified of the relevant general meeting of the company.
Time for giving report if proposal put without meeting
(5) Despite paragraphs (3) and (4), if the proposed remuneration determination will be put to the creditors in accordance with section 75‑40 of the Insolvency Practice Schedule (Corporations) (proposals without meeting), a copy of the report must be given to each of the creditors or members at the same time as notice of the proposal under that section is given.
Contents of report
(6) Without limiting paragraph (2)(a), (3)(a) or (4)(a), the report must set out the following:
(a) a summary description of the major tasks performed, or likely to be performed, by the external administrator;
(b) the costs associated with each of those major tasks and the method of calculation of the costs;
(c) the periods at which the external administrator proposes to withdraw funds from the administration account in respect of the administrator’s remuneration;
(d) an estimated total amount, or range of total amounts, of the external administrator’s remuneration;
(e) an explanation of the likely impact of that remuneration on the dividends (if any) to creditors.
70‑50 Report about remuneration to be given by provisional liquidators
(1) This section is made for the purposes of section 70‑50 of the Insolvency Practice Schedule (Corporations).
(2) Before a determination about remuneration is made by agreement between a provisional liquidator and a committee of inspection under section 60‑16 of the Insolvency Practice Schedule (Corporations), the provisional liquidator must:
(a) prepare a report setting out:
(i) such matters as will enable the committee of inspection to make an informed assessment as to whether the proposed remuneration is reasonable; and
(ii) a summary description of the major tasks performed, or likely to be performed, by the provisional liquidator; and
(iii) the costs associated with each of those major tasks; and
(b) give a copy of the report to each member of the committee of inspection at the same time as the members are notified of the relevant meeting of the committee.
(3) Before a determination about remuneration is made by resolution of the creditors under section 60‑16 of the Insolvency Practice Schedule (Corporations), the provisional liquidator must:
(a) prepare a report setting out:
(i) such matters as will enable the company’s creditors to make an informed assessment as to whether the proposed remuneration is reasonable; and
(ii) a summary description of the major tasks performed, or likely to be performed, by the provisional liquidator; and
(iii) the costs associated with each of those major tasks; and
(b) give a copy of the report to each of the company’s creditors at the same time as the creditors are notified of the relevant meeting of creditors.
70‑55 Requests for information by the Commonwealth
(1) This section is made for the purposes of subsection 70‑55(4) of the Insolvency Practice Schedule (Corporations).
(2) Subject to subsection (3), the Commonwealth must bear the cost of providing information or a report or document requested by the Commonwealth under subsection 70‑55(2) of the Insolvency Practice Schedule (Corporations) if, in the opinion of the external administrator, there is not sufficient property available to comply with the request for the information, report or document.
(3) If:
(a) a company is under external administration; and
(b) either:
(i) a former employee of the company has made a claim for financial assistance from the Commonwealth in relation to unpaid employment entitlements; or
(ii) the Commonwealth considers that such a claim is likely to be made; and
(c) the external administrator of the company has lodged a report under the Act; and
(d) the Commonwealth requests a copy of the report in accordance with section 70‑55 of the Insolvency Practice Schedule (Corporations);
the Commonwealth must bear the cost of providing a copy of the report to the Commonwealth.
70‑60 Reporting to ASIC
(1) This section is made for the purposes of section 70‑60 of the Insolvency Practice Schedule (Corporations).
Notice of appointment
(2) If an external administrator is appointed:
(a) under subsection 436E(4), subsection 444A(2) or subsection 449C(1), (4) or (6) of the Act; or
(b) by the Court under section 90‑15 of the Insolvency Practice Schedule (Corporations);
the external administrator must lodge with ASIC a notice of the appointment in the approved form before the end of the next business day after the appointment.
Notice of restructuring plan
(2A) If, at any time after a company makes a restructuring plan, ASIC requests a copy of the plan, the restructuring practitioner for the plan must comply with the request as soon as reasonably practicable.
Notice of ending of administration
(3) If the administration of a company ends on the happening of an event of a kind mentioned in subsection 435C(2) or (3) of the Act, the external administrator of the company must lodge with ASIC a notice of the happening of the event and the ending of the administration of the company as soon as practicable after the event.
(4) Subsection (3) does not apply if a notice of the happening of the event is lodged with ASIC in accordance with the Act.
Division 75—Meetings
Subdivision A—Preliminary
75‑1 Authority
Unless otherwise specified, this Division:
(a) is made for the purposes of section 75‑50 of the Insolvency Practice Schedule (Corporations); and
(b) applies in relation to meetings concerning companies under external administration.
Subdivision B—Convening meetings
75‑5 When certain meetings must be convened
(1) A meeting directed to be convened under section 75‑15 of the Insolvency Practice Schedule (Corporations) must be held as soon as reasonably practicable.
(2) Subsection (1) does not apply if, under the Act or these Rules, it is not reasonable for the external administrator to comply with the direction to convene the meeting.
75‑10 Persons to whom notice of meetings to be given
The convenor of a meeting must give notice in writing of the meeting to as many of the persons appearing on the company’s books or otherwise to be:
(a) in the case of a meeting of members, creditors or contributories of the company—a member, creditor or contributory of the company; or
(b) in the case of a joint meeting of creditors and members of the company—a member or creditor of the company; or
(c) in the case of a meeting of a committee of inspection—a member of the committee of inspection; or
(d) in the case of a meeting of eligible employee creditors—an eligible employee creditor; or
(e) in the case of a meeting of creditors of companies in a pooled group—the creditors of a company in the group;
as reasonably practicable.
Note: Notice of the meeting must be lodged with ASIC—see section 75‑40.
75‑15 How notice of meetings to be given
(1) Notice of a meeting must:
(a) specify:
(i) if there is only one location at which the persons who are entitled to physically attend the meeting may do so—the date, time and place for the meeting; and
(ii) if there are 2 or more locations at which the persons who are entitled to physically attend the meeting may do so—the date and time for the meeting at each location, and the main location for the meeting for the purposes of subparagraph 75‑75(5)(a)(i); and
(iii) if virtual meeting technology is to be used in holding the meeting and none of the persons entitled to attend the meeting is entitled to physically attend—the physical address in this jurisdiction nominated by the convenor of the meeting for the purposes of paragraph 75‑75(6)(a) (the notional place for the meeting); and
(b) specify the purpose for which the meeting is being convened; and
(ba) if virtual meeting technology is to be used in holding the meeting—specify whether votes at the meeting must be taken on a poll; and
(c) state the effect of section 75‑85 (entitlement to vote as creditor at meetings of creditors); and
(d) be in the approved form.
(2) In the absence of evidence to the contrary, a statement in accordance with the approved form by the person convening a meeting (or a person acting on his or her behalf) is sufficient proof of the notice having been sent to a person at the address specified for that person in that notice.
75‑20 Time for giving notice of meetings
(1) The convenor of a meeting must give notice of the meeting not less than 10 business days before the day of the meeting.
(2) Subsection (1) does not apply to the following meetings:
(a) a meeting of creditors under section 436E or 439A, or subsection 449C(4), of the Act;
(b) a meeting of eligible employee creditors under section 444DA of the Act;
(c) a meeting of the eligible unsecured creditors of each of the companies in a pooled group required to be convened under subsection 577(1A) of the Act;
(d) a meeting of a committee of inspection, if the external administrator thinks it appropriate in the circumstances.
(3) A notice of a joint meeting of the creditors and members of a company must be sent to the creditors of the company at the same time as it is sent to the members of the company.
75‑25 Notice about voting by proxy and appointment of attorney
A person convening a meeting must:
(a) include, with the notice of the meeting, a form for use in appointing a proxy; and
(aa) include at least one of the following:
(i) a place for the purposes of receipt of proxy appointments;
(ii) sufficient information to allow a person to appoint a proxy by means of electronic communication; and
(b) ensure that neither the name nor the description of any proxy is printed or inserted in the body of the form before it is sent out; and
(c) include in the notice a statement that, if a creditor wishes to be represented at the meeting by an attorney, the creditor must arrange for the power of attorney to be produced to the external administrator at or before the meeting.
75‑30 Time and place of meetings
(1) The convenor of a meeting must convene the meeting at the time and place that the convenor thinks are most convenient for the majority of persons entitled to receive notice of the meeting.
(2) Subsection (1) does not prevent a meeting from taking place at separate venues, provided all persons attending the meeting have a reasonable opportunity to participate in the meeting.
Note: Section 75‑75 provides for virtual meeting technology to be used in holding a meeting.