Document ID: chunk:federal_register_of_legislation:C2004A04041:section:1990:p187
Version: federal_register_of_legislation:C2004A04041
Segment Type: section
Provision Reference: s 1990 (pt 187/212)
Character Range: 486515–489224

buy-back may be enforced by an order for specific performance made by a court of competent jurisdiction.

Buy-back agreement unenforceable while company insolvent

"206rb. (1) Subject to section 206rc, an agreement constituting a buy-back by a company is unenforceable while:

  (a) the company is being wound up; or

  (b) there is a provisional liquidator of the company; or

  (c) the company is under official management; or

     (d) a receiver, or a receiver and manager, of property of the company, whether or not appointed by a court, is acting; or

SCHEDULE 5—continued

     (e) a compromise or arrangement between the company and its creditors or any class of them is being administered; or

   (f) subsection (2) applies to the company.

"(2) This subsection applies to a company on a particular day unless the company is solvent on that day and may reasonably be expected to remain solvent, throughout the period of 12 months starting on that day, even if:

     (a) each buy-back offer (if any) that relates to shares in the company and remains open as at that day is accepted, and the resulting agreement is completed, during that period; and

     (b) each agreement (if any) that constitutes a buy-back by the company and remains uncompleted as at that day is completed during that period.

"(3) The onus of establishing that an agreement is unenforceable because of this section lies on the company.

Unpaid seller may prove in winding up of company

"206rc. (1) This section applies where, immediately before the relevant date in relation to a winding up of a company, obligations of the company under an agreement constituting a buy-back by the company have not been fully performed.

"(2) Subject to this Division, another party to the agreement may claim in the winding up in respect of the company's obligations under the agreement to that other party, in so far as they remain unperformed.

"(3) Subsection (2) does not limit the generality, or affect the operation, of section 553 or 554.

  "(4) Section 568 does not apply in relation to the agreement.

"(5) A person is not entitled to a distribution of money or property in the winding up in connection with a claim in respect of obligations of the company under the agreement unless the seller's obligations under the agreement, so far as they relate to the supply of documents in connection with the buy-back, have been discharged.

"(6) Subsection (5) does not affect a person's entitlement to claim in the winding up.

Ranking of seller's claim in winding up

  "206rd. (1) This section applies where a company is wound up.

"(2) A seller's claim against the company shall be postponed until all other claims in the winding up