Restructuring and insolvency FINAL pdf

Restructuring and insolvency: a mid-year round-up

AUGUST 2026

Heading on multiple Contents lines with a tight leading Millatquodit que dolupid milictatia voluptae doluptaquam nis as moluptatem nossecest ius eles moluptiasped quas debis as moleniendae. Itatiur ibusdan ditiatumquo min cumquam dolupta qui SUBTITLE BOLD CAPS In corro conse ent fuga. Ut eat et imus nulla voluptibus, coreperia cus audae sequodit que volorita simagnia ea quo et harior sitatem lab ius molupta conse pe liassim usanditi sitiusa velectur, quis eriae lit, ut exceste voluptaquia vent qui alit eos utatemporum volorep elestem eria sum veliqui dipsapide sum que il illit expla serum quidi abo. Sedi bla nos id quiatis estiaspis maximil lignimi, aspe nosam la eratem ini omnissi ncturepudi quiatem as saectota volupta tisqui omnitio rectin cum invent apel ipsam ea voluptae. Et perati odi autecaborro cus, sequatia pe re is estiatur?

Nimetur, quiatiae aut pos mosanitam ut quam sapient voles ma conestinulpa audi ra essum quassim usandipietur rersper natiusa sed quati dolut ex et ma parumqui odi qui to dolorer untium res seribus, sit, volupietus, aruptat.

Iquam, ommolor uptatiam, consequi optas et lant imusda nobitio nseque inctiorem aped quate vendae optiis ma solore comni

omniandiae con nescia volorro endicati te dollicium laturiatio. El ipsam doluptas id milibea dit eaquis as modissi tibusdam quiassi mporecto int ad quisimaxim am incil modicae offici volorum quis eum ipsum adita et perspid quamus nos eos iusam in plique niet asint quis siti officta sequo totat.

Ro omnim rescime ndeliquatiae ent aut molorup tiossitibus alitatur, saperspe non pere ero dolentibus mi, as volliquia andandit fugitat quam si ulluptate pratum volor sitem quis conecto taeptas alibusdandis nobis modis unt eum que plit aut excepedi re volorporror sam, sit dolore, sit doles accae veles verum dis aliquid quiam, nistore pereperitiam facearu piendent volorum fugiam fugitiis sint alit fugia ipitem sunt as minus ea consequia nihici de rem lab is dolupid que sequas est, quatibust, natium qui as arumquas magnamu scillab orerspe lessintem fugiandel il ipsamusa aborentiis elist qui de laborrum voluptatur arisqui dellamus velit, tem la con nullorum volupta tumquundis nuscil ipsanditiis dissunte

Bell Gully

Restructuring and insolvency: a mid-year round-up

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Freezing orders

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Litigation funding in liquidation

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Deeds of Company Arrangement and the move from voluntary administration to liquidation

08

Mortgagee sales and vendor finance

10

Bypassing farm debt mediation

11

Shareholder current accounts and company financials

12

Director standing to challenge liquidator decisions

13

GST liability for administrators

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“Expectancies” and secured property

15

Our practice

16

Our team

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Restructuring and insolvency: a mid-year round-up

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Restructuring and insolvency: a mid-year round-up This mid-yearque restructuring and insolvency Millatquodit dolupid milictatia voluptae round-up comes againstnis a backdrop of economic uncertainty doluptaquam as moluptatem nossecest ius eles and moluptiasped debis as moleniendae.

Itatiur elevated levelsquas of business distress in New Zealand.

Those doing business with New Zealand’s health sector should expect a busy year in 2026, with major reforms on the horizon. ibusdan ditiatumquo min cumquam dolupta qui

The last 12BOLD SUBTITLE months CAPS have been challenging for New Zealand businesses.There were more In corro conse ent fuga.

Ut eat et imus than 3,000 company liquidations in thenulla 12 voluptibus, coreperia cus audae sequodit months to 30 June 2026, a level not seen que volorita simagnia ea quo in et the harior sitatem since 2009.

The conflict Middle Eastlab ius molupta conse pe liassim usanditi sitiusa disrupted New Zealand’s economic recovery velectur, eriae lit, ut exceste have voluptaquia and, whilequis inflationary pressures eased, vent qui alit eos utatemporum volorep a lasting resolution to the conflict remains elestem elusive. eria sum veliqui dipsapide sum que il illit expla serum quidi abo. Sedi bla nos id quiatis estiaspis maximil lignimi, aspe nosam la eratem ini omnissi ncturepudi quiatem as saectota volupta tisqui omnitio rectin cum invent apel ipsam ea voluptae. Et perati odi autecaborro cus, sequatia pe re is estiatur?

Nimetur, quiatiae aut pos mosanitam ut quam sapient voles ma conestinulpa audi ra essum quassim usandipietur rersper natiusa sed quati dolut ex et ma parumqui odi qui to dolorer untium res seribus, sit, volupietus, aruptat.

Iquam, ommolor uptatiam, consequi optas et lant imusda nobitio nseque inctiorem aped quate vendae optiis ma solore comni

Legal developments omniandiae con nescia in the volorro world endicati of te dollicium laturiatio. restructuring and insolvency El ipsam doluptas have alsoid milibea dit apace. continued eaquis Over as modissi the last tibusdam 12 months, quiassi mporecto there has been int adaquisimaxim stream of decisions am incil modicae offici the from volorum New Zealand quis eumHigh ipsum Court adita and et perspid quamus from overseas, nos eoscovering iusam ina plique range of niet topics asint quis siti officta relevant to creditors sequoand totat. insolvency practitioners. This restructuring and Ro omnim rescime insolvency round-upndeliquatiae summarisesent theaut key molorup tiossitibus alitatur, saperspe non pere developments. ero dolentibus mi, as volliquia andandit fugitat quam si ulluptate pratum volor sitem quis conecto taeptas alibusdandis nobis modis unt eum que plit aut excepedi re volorporror sam, sit dolore, sit doles accae veles verum dis aliquid quiam, nistore pereperitiam facearu piendent volorum fugiam fugitiis sint alit fugia ipitem sunt as minus ea consequia nihici de rem lab is dolupid que sequas est, quatibust, natium qui as arumquas magnamu scillab orerspe lessintem fugiandel il ipsamusa aborentiis elist qui de laborrum voluptatur arisqui dellamus velit, tem la con nullorum volupta tumquundis nuscil ipsanditiis dissunte

Bell Gully

Restructuring and insolvency: a mid-year round-up

3

Freezing orders Heading on multiple lines with a tight Getting judgment is one thing; getting paid is another. One Da Costa Enterprises Ltd v Mellow tool in a creditor’s toolbox is to seek a freezing order to stop leading the dissipation of assets. But what happens if the assets are [2026] NZHC 214

not owned byque thedolupid defendant, but by an associated company Millatquodit milictatia voluptae or other third nis party?

Two recent nossecest decisions ius have considered doluptaquam as moluptatem eles this issue – with conflicting results. moluptiasped quas debis as moleniendae.

Itatiur ibusdan ditiatumquo min cumquam dolupta qui

SUBTITLE BOLD CAPS

omniandiae con nescia volorro endicati te dollicium laturiatio. El ipsam doluptas id In corro ent fuga. Ut eat et imus nulla Daconse Costa Negligence claim Mr Mellow's milibea dit eaquis as modissi tibusdam quiassi voluptibus, coreperia cus audae sequodit que order Freezing mporecto int ad quisimaxim am incil modicae estate volorita simagnia ea quo et harior sitatem lab (Plaintiffs) offici volorum quis eum ipsum adita et perspid ius molupta conse pe liassim usanditi sitiusa quamus nos eos iusam in plique niet asint velectur, quis eriae lit, ut exceste voluptaquia quis siti officta sequo totat. vent qui alit eos utatemporum volorep elestem eria sum veliqui dipsapide sum que Ro omnim rescime ndeliquatiae ent aut il illit expla serum quidi abo. Sedi bla nos id molorup tiossitibus alitatur, saperspe non pere quiatis estiaspis maximil lignimi, aspe nosam ero dolentibus mi, as volliquia andandit fugitat la eratem ini omnissi ncturepudi quiatemFREEZING as quam si ulluptate pratum volor sitem quis 100% shareholding saectota volupta tisqui omnitio rectin cumORDER?conecto taeptas alibusdandis nobis modis unt invent apel ipsam ea voluptae. Et perati odi eum que plit aut excepedi re volorporror sam, autecaborro cus, sequatia pe re is estiatur? sit dolore, sit doles accae veles verum dis aliquid quiam, nistore pereperitiam facearu Nimetur, quiatiae aut pos mosanitam ut piendent volorum fugiam fugitiis sint alit fugia quam sapient voles ma conestinulpa audi ra ipitem sunt as minus ea consequia nihici de essum quassim usandipietur rersper natiusa rem lab is dolupid que sequas est, quatibust, sed quati dolut ex et ma parumqui odi qui to natium qui as arumquas magnamu scillab dolorer untium res seribus, sit, volupietus, $820,000 orerspe lessintem fugiandel il ipsamusa aruptat. aborentiis elist qui de laborrum voluptatur Group Melbros arisqui dellamus velit, tem la con nullorum Iquam, ommolor uptatiam, consequi optas company Limited volupta tumquundis nuscil ipsanditiis dissunte et lant imusda nobitio nseque inctiorem

The plaintiffs were a property development group. They alleged that their accountant (Mr Mellow) was liable for losses arising from tax compliance issues. Mr Mellow had recently died, so the plaintiffs brought a claim against his estate and obtained a freezing order against its executors.

Mr Mellow was the sole shareholder of Melbros Limited (Melbros), a company which owned a residential property in Hamilton.

A company in the plaintiff group was contractually obliged to buy the property from Melbros for NZ$820,000.

The plaintiffs applied for a freezing order against Melbros to freeze the sale proceeds once the transaction completed.

A freezing order can be made against a third party under High Court Rule 32.5(5) where: • A third party has possession or control of the defendant’s assets; or • A court process may ultimately be available under which a third party may be obliged “to disgorge assets or contribute toward satisfying the judgment” against the defendant.

Property in Hamilton

In Da Costa, the Court adopted a broad interpretation to the second category. The case held that all that was needed was “some process, ultimately enforceable by the courts, … pursuant to which, whether by appointment of a liquidator, trustee in bankruptcy, receiver or otherwise, the third party may be obliged to disgorge property or otherwise contribute to the funds or property of the [defendant] to help satisfy the judgment against the [defendant]”.

That test was satisfied on the facts. There was likely a shareholder debt owing to Melbros.

As a result, if the plaintiffs obtained judgment against Mr Mellow’s estate either: • The official assignee could be appointed and then pursue a claim against Melbros for the debt; or • The Court could appoint a receiver in aid of execution of the judgment against the estate, who could then enforce the debt owed by Melbros.

Alternatively, even if there was no debt owing from Melbros, Mr Mellow’s estate was the shareholder of Melbros. The assignee or receiver could exercise rights over the shares for the benefit of the plaintiffs.

aped quate vendae optiis ma solore comni

Bell Gully

Restructuring and insolvency: a mid-year round-up

4

Freezing orders Heading on multiple lines with a tight leading Millatquodit que dolupid milictatia Two applications for freezing ordersvoluptae were doluptaquam nis as moluptatem nossecest recently made against the liquidators of ius eles moluptiasped quas debis as moleniendae. Itatiur Cryptopia Limited. Both failed.

Mr Cattermole

Claim for 12 bitcoin

Dr Sharma

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Sharma v Cryptopia

SUBTITLE BOLD CAPS

omniandiae con nescia volorro endicati te Liquidators dollicium laturiatio. El ipsam doluptas id FREEZING In corro conse ent2999, fuga. Ut eat et imus nulla [2025] NZHC [2026] NZHC 671 milibea dit eaquis as modissi tibusdam quiassi of ORDER? voluptibus, coreperia cus audae sequodit que mporecto int ad quisimaxim am incil modicae volorita simagnia ea quo et harior sitatem lab Cryptopia offici volorum quis eum ipsum adita et perspid ius molupta usanditi The first wasconse made pe by liassim Dr Sharma who sitiusa alleged that he was the quamus nosowner eos iusam in plique niet asint velectur, quis eriaeoflit, ut exceste voluptaquia of NZ$108 million Bitcoin held by the liquidators.quis Thesiti liquidators officta sequo totat. vent qui alit eos utatemporum volorep disputed that claim. Dr Sharma applied to freeze Bitcoin of that value, elestem eria sum dipsapide sum que theRo omnim rescime concerned that theveliqui liquidators would distribute company’s assets. ndeliquatiae ent aut The Court dismissed il illit expla serum quidi abo. Sedi bla nos id molorup tiossitibus alitatur, saperspe non pere the application for a freezing order because: The High Court dismissed the application for an urgent freezing order: quiatis estiaspis maximil lignimi, aspe nosam ero dolentibus mi, as volliquia andandit fugitat a. Mr Cattermole’s application was procedurally defective (no la eratem ini omnissi ncturepudi quiatem as quam si ulluptate pratum volor sitem quis statement of claim and no undertaking as to damages had been a.

There was no good arguable case that Dr Sharma owned the Bitcoin saectota volupta tisqui omnitio rectin cum conecto taeptas alibusdandis nobis modis unt filed); in question; invent apel ipsam ea voluptae. Et perati odi eum que plit aut excepedi re volorporror sam, autecaborro sequatia pe re isdissipation, estiatur? as thesitliquidators dolore, sitwere doles accae b. veles dis did not come to the Court with “clean hands”; and Mr verum Cattermole b.

There wascus, no risk of imminent aliquid quiam, nistore pereperitiam facearu not proposing distribute imminently; Nimetur, quiatiaetoaut pos mosanitam ut and The Court had “no jurisdiction” to make an order against the piendent volorum fugiam c. fugitiis sint alit fugia quam sapient had volesnot magiven conestinulpa audi ra liquidators, sunt as minus nihiciwho de were a third party. c.

Dr Sharma a good undertaking as ipitem to damages and did ea consequia essum quassim usandipietur rem lab is dolupid que sequas est, quatibust, not have “clean hands”. rersper natiusa sed quati dolut ex et ma parumqui odi qui to In relationscillab to the final point, the Court held that there was “no natium qui as arumquas magnamu dolorer untium seribus, volupietus,Mr Cattermole jurisdiction” because Mr Cattermole had “no beneficial or legal interest The second wasres made

by Mrsit, Cattermole. alleged that orerspe lessintem fugiandel il ipsamusa aruptat. in any of the Bitcoin Dr Sharma is claiming” and rather only had a Dr Sharma owed him 12 of Dr Sharma’s 399 Bitcoinaborentiis held at Cryptopia elist qui de laborrum voluptatur claim for “a breach under an alleged agreement between them. Mr Cattermole sought to arisqui dellamus velit, tem la con nullorum of contract”. However, in our view this conclusion is Iquam,the ommolor consequi optas to reconcile freeze assets uptatiam, in the hands of the liquidators, before theytumquundis could go tonuscildifficult volupta ipsanditiis dissuntewith Da Costa and High Court Rule 32.5(5), neither et lant imusda nobitio Dr nseque inctiorem of which was referred to in Sharma.

Dr Sharma (assuming Sharma’s claim ultimately succeeded). aped quate vendae optiis ma solore comni

Bell Gully

Restructuring and insolvency: a mid-year round-up

FREEZING ORDER?

Claim for 399 bitcoin

Key takeaways for restructuring and insolvency • Freezing orders are flexible and valuable weapons in a creditor’s arsenal.

• The jurisdiction is broad and can extend to third parties connected to the defendant.

5

Litigation funding Heading on multiple in liquidation lines with a tight leading Litigation funding is increasingly important. In 100

Investments,que thedolupid High Court of New Zealand considered Millatquodit milictatia voluptae a range of important issues which arise when a liquidator doluptaquam nis as moluptatem nossecest ius eles seeks funding.quas debis as moleniendae. Itatiur moluptiasped ibusdan ditiatumquo min cumquam dolupta qui

100 Investments Ltd v Walker & Ors SUBTITLE BOLD CAPS omniandiae con nescia volorro endicati te [2025] NZHC In corro conse ent3486 fuga. Ut eat et imus nulla voluptibus, coreperia cus audae sequodit que volorita simagnia ea quo et harior sitatem lab ius molupta pe liassim sitiusa The Propertyconse Ventures group usanditi (PVL) collapsed velectur, quisinto eriae lit, ut exceste voluptaquia and was put liquidation, leaving a vent qui alit eos utatemporum shortfall of hundreds of millionsvolorep of dollars. elestem eriasignificant sum veliqui dipsapide sum There were secured debts to que Allied il illit expla serum quidi abo.

Sedi blaFinance nos id Farmers Investments and Dominion quiatis estiaspis maximilRobert lignimi,Walker, aspe nosam Group.

PVL’s liquidator, la eratem ini omnissi ncturepudi quiatem as commenced claims against the companies’ saectota volupta tisqui omnitio rectin cum former directors, auditors and valuers. invent apel ipsam ea voluptae. Et perati odi To fund the proceedings, autecaborro cus, sequatiathe peliquidator re is estiatur? obtained litigation funding from a subsidiary Nimetur, quiatiae posproceeds mosanitam ut of LPF Group Ltd. aut As the of these quam sapient voles ma conestinulpa ra claims would be caught by the Allied audi Farmers’ essum quassim usandipietur rersper natiusa security, the funder purchased the first sed quatisecurity. dolut exAetregistration ma parumqui odiput quithe to ranking issue dolorer of untium res seribus, sit, volupietus, priority that debt into question, causing the aruptat.to also purchase the second ranked funder secured debt.

Iquam, ommolor uptatiam, consequi optas et lant imusda nobitio nseque inctiorem aped quate vendae optiis ma solore comni

dollicium laturiatio. El ipsam doluptas id milibea dit eaquis as modissi tibusdam quiassi mporecto int ad quisimaxim am incil modicae offici volorum quis eum ipsum adita et perspid Ultimately, claims settled quamus nosthe eosliquidator’s iusam in plique niet asint for approximately NZ$39 million.

Given the quis siti officta sequo totat. possibility of a dispute over the distribution of Ro omnim rescime ndeliquatiae these funds, the liquidators and ent the aut funders molorup tiossitibus alitatur,agreement, saperspe non pere entered into a distribution which ero dolentibus mi,funder as volliquia andandit provided that the did not need tofugitat share quam si ulluptate volorcreditors. sitem quis the proceeds withpratum unsecured They conecto taeptas unt also agreed that alibusdandis the purchasenobis of themodis secured eum aut excepedi volorporror debt que was plit a project cost forre the purposes sam, of sit doles accae veles verum dis thedolore, fundingsitarrangement. aliquid quiam, nistore pereperitiam facearu The resultvolorum was thatfugiam around NZ$33 million piendent fugitiis sint alit fugia would be paid to the funder, with the balance ipitem sunt as minus ea consequia nihici de going to the liquidator for fees.

Unsecured rem lab is dolupid que sequas est, quatibust, creditors left with nothing. natium quiwere as arumquas magnamu scillab orerspe lessintem fugiandel il ipsamusa Mr Walker was later replaced as a liquidator aborentiis elist qui de laborrum voluptatur and faced a series of challenges to his arisqui dellamus velit, tem la con nullorum conduct. The decision addressed just under volupta tumquundis nuscil ipsanditiis dissunte a dozen issues. We highlight three in this round-up.

Bell Gully

Restructuring and insolvency: a mid-year round-up

6

Litigation funding Heading on multiple in liquidation lines with a tight leading 100 Investments Ltd v Walker & Ors [2025] NZHC 3486

Millatquodit que dolupid milictatia voluptae doluptaquam nis as moluptatem nossecest ius eles moluptiasped quas debis as moleniendae.

Issue 1 Issue 2Itatiur ibusdan ditiatumquo min cumquam dolupta qui

Was the liquidator under a duty to obtain approval forBOLD the funding SUBTITLE CAPS and distribution agreements?

In corro conse ent fuga. Ut eat et imus nulla The Court reaffirmed court approval voluptibus, coreperia that cus audae sequoditisque not needed for commercial decisions made volorita simagnia ea quo et harior sitatem lab by amolupta liquidator.

Funding arrangements are ius conse pe liassim usanditi sitiusa commercial which typically will velectur, quisdecisions, eriae lit, ut exceste voluptaquia not require court’s blessing. Mr Walker was vent qui alitaeos utatemporum volorep under noeria duty to seek thedipsapide Court’s approval. elestem sum veliqui sum que il illit expla serum quidi abo. Sedi bla nos id The challenge to the distribution agreement quiatis estiaspis maximil lignimi, aspe nosam was also unsuccessful. The plaintiffs la eratem ini omnissi ncturepudi quiatem as submitted that the matters agreed to were of saectota volupta tisqui omnitio rectin cum a legal, rather than commercial, nature and invent apel ipsam ea voluptae. Et perati odi that the Court’s approval should have been autecaborro cus, sequatia pe re is estiatur? obtained.

Nimetur, quiatiae aut pos mosanitam ut The Court disagreed, finding that there was quam sapient voles ma conestinulpa audi ra a dispute as to the funders’ entitlement and essum quassim usandipietur rersper natiusa that any decision to compromise it was a sed quati dolut ex et ma parumqui odi qui to matter of business judgment. dolorer untium res seribus, sit, volupietus, aruptat.

Iquam, ommolor uptatiam, consequi optas et lant imusda nobitio nseque inctiorem aped quate vendae optiis ma solore comni

What is the extent of the liquidator’s priority over litigation proceeds? omniandiae con nescia volorro endicati te dollicium laturiatio. El ipsam doluptas id milibea dit eaquis as modissi tibusdam quiassi The Court, following the approach in mporecto int ad quisimaxim am incil modicae Australia, held that a secured creditor is offici volorum quis eum ipsum adita et perspid not entitled to the benefit of a fund created quamus nos eos iusam in plique niet asint through the liquidator’s efforts without quis siti officta sequo totat. the liquidator’s costs, expenses and remuneration first being met. ent aut Ro omnim rescime ndeliquatiae molorup tiossitibus alitatur, saperspe non pere However, this was only to the extent that the ero dolentibus mi, as volliquia andandit fugitat costs were reasonable. quam si ulluptate pratum volor sitem quis conecto taeptas alibusdandis unt The Court concluded that the nobis costs modis claimed eum que plit aut excepedi re volorporror sam,

by Mr Walker were reasonable. At the time sit sitarrangements doles accae veles disinto, thedolore, funding wereverum entered aliquid quiam, nistore pereperitiam facearu there appeared to be good claims but no piendent volorum fugiam fugitiis alit fugia assets within the PVL group, andsint no other ipitem sunt as minus ea consequia nihici secured creditor or litigation funder was de rem labtois fund dolupid sequas est, quatibust, willing the que proceedings. natium qui as arumquas magnamu scillab orerspe lessintem fugiandel il ipsamusa aborentiis elist qui de laborrum voluptatur arisqui dellamus velit, tem la con nullorum volupta tumquundis nuscil ipsanditiis dissunte

Bell Gully

Issue 3 When does the limitation period on claims commence for claims under section 301 of the Companies Act? The Court considered whether the limitation period on claims made under section 301 of the Companies Act started on the date of the first liquidator’s appointment or, where a company’s liquidator is replaced, on the date of the subsequent liquidator’s appointment.

The Court concluded that the limitation period runs from the first liquidator’s appointment date. This enabled a liquidator to have sufficient time to investigate claims, while ensuring that the limitation period could not be continuously extended by appointing further liquidators.

Key takeaways for restructuring and insolvency • The Court’s approval of funding arrangements is not essential.

However, liquidators must be able to demonstrate they undertook a robust assessment of whether an agreement is in the best interests of creditors and the liquidation.

• Secured creditors’ claims to proceeds of litigation are subject to the liquidator’s costs and expenses, but these must be reasonable.

• The reasonableness of a liquidator’s costs (and a funder’s fees) cannot be challenged by mere reference to the share taken by a funder. Any challenge will need to be based on market evidence, the risks faced by a funder, and the possibility of engaging an alternate litigation funder.

• The limitation period for a claim under section 301 runs from the date of the first liquidator’s appointment.

Restructuring and insolvency: a mid-year round-up

7

Heading multipleArrangement and the move Deeds of on Company lines a tightadministration to liquidation from with voluntary leading Rahman v Shepherd

Millatquodit que dolupid milictatia voluptae [2025] NZHC 3141 doluptaquam nis as moluptatem nossecest ius eles moluptiasped quasthe debis as moleniendae.

In October 2025, Court rejected a Itatiur ibusdan ditiatumquo min dolupta qui challenge to the DOCA in cumquam the voluntary

administration – con of nescia volorro endicati te SUBTITLE BOLD CAPS – and now liquidation omniandiae dollicium laturiatio. El ipsam doluptas id Wellington Taxi In corro conse entCombined fuga. Ut eat et imus nullaLimited (WCT).

October 2023

milibea dit eaquis as modissi tibusdam quiassi voluptibus, coreperia cus audae sequodit que mporecto int ad quisimaxim am incil modicaeaction against Derivative BACKGROUND volorita simagnia ea quo et harior sitatem lab directors offici volorum quis eum ipsum aditaWCT et perspid ius molupta conse pe liassim usanditi sitiusa quamus nosThere eos iusam in plique niet asint • WCT was loss-making but had substantial property assets. velectur, quis eriae lit, ut exceste voluptaquia quis siti officta sequo totat. were deep divisions amongst its driver-shareholders. vent qui alit eos utatemporum volorep elestem eria sum veliqui sum que Ro omnim ndeliquatiae ent aut • In October 2023, one dipsapide group of shareholders obtained leaverescime to il illit expla serum quidi abo.action Sedi bla nos id molorup tiossitibus alitatur, saperspe non pere commence a derivative against some of WCT’s directors. quiatis estiaspis maximil lignimi, aspe nosam ero dolentibus mi, as volliquia andandit fugitat • eratem In September 2024, the directors resolved WCTsiinto la ini omnissi ncturepudi quiatem as to put quam ulluptate pratum volor sitem quis Voluntary Administration (VA). saectota volupta tisqui omnitio rectin cum conecto taeptas alibusdandis nobis modis unt invent apel ipsam ea voluptae. Et perati odi eum que plit aut excepedi re volorporror sam, • A group of shareholders (the Rahman Group) challenged the VA, autecaborro cus, sequatia pe re is estiatur? sit dolore, sit doles accae veles verum dis on grounds that WCT was not insolvent. The Court dismissed that aliquid quiam, nistore pereperitiam facearu challenge in March 2025.

Nimetur, quiatiae aut pos mosanitam ut piendent volorum fugiam fugitiis sint alit fugia quam sapient voles ma conestinulpa audi ra suntmeeting: as minus ea consequia nihici de • The Court also made a novel direction as to the ipitem watershed essum quassim usandipietur rersper natiusa rem lab is dolupid que sequas est, quatibust, given WCT’s balance-sheet solvency, any DOCA should be approved sed quati dolut ex et ma parumqui odi qui to natium qui as arumquas magnamu scillab by 50% of shareholders, in addition to the usual creditor-approval September 2024 dolorer untium res seribus, sit, volupietus, orerspe lessintem fugiandel il ipsamusa requirement. The Rahman Group appealed that decision – and the aruptat. aborentiis elist qui de laborrum voluptatur Board puts WCT into appeal remained pending.

Voluntary Administration arisqui dellamus velit, tem la con nullorum Iquam, ommolor uptatiam, consequi optas • In June 2025, the watershed meeting occurred volupta and a DOCA was tumquundis nuscil ipsanditiis dissunte et lant imusda nobitio nseque inctiorem approved. The DOCA provided for: (a) a sale of the WCT business; aped quate vendae optiis ma solore comni and (b) the liquidation of WCT, with the administrators appointed as liquidators, to sell the property assets and resolve the litigation against the directors.

Bell Gully

March 2025

July 2025

Challenge to VA by Rahman Group dismissed

Rahman Group challenges the DOCA

Innovative directions for watershed meeting Rahman Group appeals

June 2025

September 2025

Watershed meeting

Sale of business completes

DOCA approved Sale + liquidation

Restructuring and insolvency: a mid-year round-up

8

Deeds of on Company Heading multipleArrangement and the move from voluntary lines with a tightadministration to liquidation leading Millatquodit dolupid milictatia voluptae Rahman v que Shepherd doluptaquam nis as moluptatem nossecest ius eles [2025] NZHC 3141 moluptiasped quas debis as moleniendae. Itatiur ibusdan ditiatumquo min cumquam dolupta qui

In July 2025, the Rahman Group challenged the DOCA, asking the The Court rejected the challenge: Court to declare it void under section 239ACX, or to terminate it under SUBTITLE BOLD CAPS omniandiae con nescia volorro endicati te • The DOCA was not void. Despite the literal wording of section section 239ADD on grounds of unfair prejudice. The Rahmanlaturiatio.

Group’s El ipsam dollicium doluptas id 239ABA, which said that creditors could resolve to execute a DOCA In corrowas conse ent fuga. eatlong et imus nullafor their milibea object to keep WCT Ut alive enough appeal on the dit eaquis as modissi tibusdam quiassi or appoint a liquidator, it was permissible for a DOCA both to provide voluptibus, coreperia cusvote audae sequodit que andmporecto validity of the watershed to be determined the sale of intWCT’s ad quisimaxim am incil modicae for the sale of a business and for liquidation then to follow. volorita simagnia ea quo et harior sitatem lab business unwound. offici volorum quis eum ipsum adita et perspid ius molupta conse pe liassim usanditi sitiusa quamus nos eos iusam in •plique asint The niet DOCA should not be terminated for being unfairly prejudicial. velectur, quis eriae lit, ut exceste voluptaquia quis siti officta sequo totat. While the Rahman Group would suffer prejudice by the liquidation, vent qui alit eos utatemporum volorep this was not as great as alleged. Moreover, the prejudice to others elestem eria sum veliqui dipsapide sum que Ro omnim rescime ndeliquatiae ent aut would be greater, including to: third parties who would be prejudiced il illit expla serum quidi abo. Sedi bla nos id molorup tiossitibus alitatur, saperspe non pere if the sale was unwound; and the majority shareholders who had quiatis estiaspis maximil lignimi, aspe nosam ero dolentibus mi, as volliquia andandit fugitat voted for liquidation and were expecting a capital return. la eratem ini omnissi ncturepudi quiatem as quam si ulluptate pratum volor sitem quis saectota volupta tisqui omnitio rectin cum conecto taeptas alibusdandis nobis modis unt invent apel ipsam ea voluptae. Et perati odi eum que plit aut excepedi re volorporror sam, autecaborro cus, sequatia pe re is estiatur? sit dolore, sit doles accae veles verum dis aliquid quiam, nistore pereperitiam facearu Nimetur, quiatiae aut pos mosanitam ut piendent volorum fugiam fugitiis sint alit fugia quam sapient voles ma conestinulpa audi ra ipitem sunt as minus ea consequia nihici de essum quassim usandipietur rersper natiusa rem lab is dolupid que sequas est, quatibust, sed quati dolut ex et ma parumqui odi qui to natium qui as arumquas magnamu scillab dolorer untium res seribus, sit, volupietus, orerspe lessintem fugiandel il ipsamusa aruptat. aborentiis elist qui de laborrum voluptatur arisqui dellamus velit, tem la con nullorum Iquam, ommolor uptatiam, consequi optas volupta tumquundis nuscil ipsanditiis dissunte et lant imusda nobitio nseque inctiorem

Key takeaways for restructuring and insolvency • The VA regime is flexible and the Court is likely to reject technical interpretations of the legislation.

• The Court will be focussed on the “reality of the situation” and avoiding prejudice to third parties.

aped quate vendae optiis ma solore comni

Bell Gully

Restructuring and insolvency: a mid-year round-up

9

Mortgagee Heading onsales multiple and vendor finance lines with a tight Green & McCahill v Williams leading [2025] NZHC 2581

Millatquodit que dolupid milictatia voluptae doluptaquam nis as moluptatem nossecest ius eles A mortgagee’s duties when exercising its power of sale are well known. moluptiasped quas debis as moleniendae. Itatiur But what happens if the mortgagee also provides vendor finance to the ibusdan ditiatumquo min cumquam dolupta qui purchaser?

SUBTITLE BOLD CAPS In corro conse ent fuga. Ut eat et imus nulla voluptibus, coreperia cus audae sequodit que volorita simagnia ea quo et harior sitatem lab ius molupta conse pe liassim usanditi sitiusa velectur, quis eriae lit, ut exceste voluptaquia vent qui alit eos utatemporum volorep elestem eria sum veliqui dipsapide sum que il illit expla serum quidi abo. Sedi bla nos id quiatis estiaspis maximil lignimi, aspe nosam la eratem ini omnissi ncturepudi quiatem as saectota volupta tisqui omnitio rectin cum invent apel ipsam ea voluptae. Et perati odi autecaborro cus, sequatia pe re is estiatur?

Nimetur, quiatiae aut pos mosanitam ut quam sapient voles ma conestinulpa audi ra essum quassim usandipietur rersper natiusa sed quati dolut ex et ma parumqui odi qui to dolorer untium res seribus, sit, volupietus, aruptat.

Iquam, ommolor uptatiam, consequi optas et lant imusda nobitio nseque inctiorem aped quate vendae optiis ma solore comni

Green & McCahill Holdings Limited (GMHL) owned land at Weiti Bay omniandiae con nescia volorro endicati forming part oftea large development project being carried out by dollicium laturiatio. El ipsam doluptas id companies associated with Mr Williams. Before the development was milibea dit eaquis as modissi tibusdam quiassi completed, Mr Williams and GMHL’s director fell out. The development mporecto int ad quisimaxim am incil stalled and modicae became distressed. The mortgagee of the development, offici volorum quis eum ipsum adita et perspid Lambton Quay, exercised its power to sell the secured land. quamus nos eos iusam in plique niet asint As part of the sale transaction, Lambton Quay provided partial vendor quis siti officta sequo totat. financing to the purchaser, a company associated with Mr Williams.

Ro omnim rescime ndeliquatiae ent aut GMHL challenged the mortgagee sale and alleged that the parties had molorup tiossitibus alitatur, saperspe non pere plotted againstfugitat it to acquire the land by subterfuge. ero dolentibus mi, as volliquia andandit quam si ulluptate pratum volor sitem quis The nobis Court modis analysed conecto taeptas alibusdandis untthe mortgagee’s duty under section 176 of the Property Law Act 2007, which requires a mortgagee to exercise eum que plit aut excepedi re volorporror sam, reasonable care to obtain the best price reasonably obtainable as at sit dolore, sit doles accae veles verum dis the time of the sale. aliquid quiam, nistore pereperitiam facearu The Court held that: piendent volorum fugiam fugitiis sint alit fugia • The section 176 duty did not arise in respect of Lambton Quay’s ipitem sunt as minus ea consequia nihici de provision of vendor finance for the mortgagee sale, because the rem lab is dolupid que sequas est, quatibust, provision of finance was not designed to obscure the true mortgagee natium qui as arumquas magnamu scillab sale price. orerspe lessintem fugiandel il ipsamusa aborentiis elist qui de laborrum • Thevoluptatur existence of the vendor financing did not reverse the onus and arisqui dellamus velit, tem la require con nullorum Lambton Quay to show that it had satisfied its section 176 volupta tumquundis nuscil ipsanditiis dissunte duty, notwithstanding that Lambton Quay had an economic interest

Key takeaways for restructuring and insolvency • Transactions connected to a mortgagee sale, such as vendor finance by the mortgagee, do not generally impose greater obligation on the mortgagee, provided the transactions are not designed to obscure the sale price.

in the transaction through the provision of vendor finance.

Bell Gully

Restructuring and insolvency: a mid-year round-up

10

Heading onfarm multiple Bypassing debt mediation lines with a tight leading Millatquodit que dolupid milictatia voluptae doluptaquam nis as moluptatem nossecest ius eles McNamara Ltd Lopez moluptiasped Farms quas debis asvmoleniendae.

Itatiur [2026] NZHC 1447 ibusdan ditiatumquo min cumquam dolupta qui SUBTITLE BOLD CAPS For the first time, the High Court has allowed Insecured corro conse ent fuga.

Ut eat etFarm imus Debt nulla a creditor to bypass the voluptibus,Act coreperia cus sequodit que Mediation 2019 on theaudae grounds of volorita simagnia quo et harior sitatem lab urgency.

While theeacircumstances of this case ius molupta conse pe liassim usanditi were extreme, the case illustrates the sitiusa Court’s velectur, quis eriae lit, ut exceste voluptaquia approach to assessing such applications. vent qui alit eos utatemporum volorep The Farmeria Debt Mediation Act prohibits elestem sum veliqui dipsapide sum que secured creditors from taking enforcement il illit expla serum quidi abo. Sedi bla nos id action farm property without quiatisagainst estiaspis maximil lignimi, aspe nosam first attempting to engage in mediation. la eratem ini omnissi ncturepudi quiatem as Section allowstisqui the High Court to grant saectota61 volupta omnitio rectin cum an exception where there is “an event ofodi invent apel ipsam ea voluptae. Et perati urgency”, e.g. there is a risk that collateral autecaborro cus, sequatia pe re is estiatur? will be destroyed, damaged or dissipated.

Nimetur, quiatiae aut pos mosanitam ut In this sapient case, McNamara Farms Ltd audi ra quam voles ma conestinulpa (McNamara) funded a partnership’s essum quassim usandipietur rersper natiusa purchase of dairy it grazed sed quati dolut ex herd et mawhich parumqui odi qui to and milked on McNamara’s land under a dolorer untium res seribus, sit, volupietus, sharemilking agreement. The advance was aruptat. secured with a GSA. The partnership fell Iquam, ommolor uptatiam, consequi optas apart and the sharemilking agreement was et lant imusda nobitio nseque inctiorem terminated. aped quate vendae optiis ma solore comni

omniandiae con nescia volorro endicati te One of thelaturiatio. partners El (Mr Veermak) thenidbegan dollicium ipsam doluptas selling off the partnerships’ cattle, contrary milibea dit eaquis as modissi tibusdam quiassi to McNamara’s GSA. When McNamara mporecto int ad quisimaxim am incil modicae approached toeum resolve the adita issue,etheperspid was offici volorumhim quis ipsum aggressive and uncooperative.

McNamara quamus nos eos iusam in plique niet asint feared its remaining collateral would be quis sitithat officta sequo totat. sold off on the black market. It applied for urgent orders from ndeliquatiae the Court allowing it to Ro omnim rescime ent aut appoint over the cattle, withnon the pere sale molorupreceivers tiossitibus alitatur, saperspe proceeds to bemi, held ero dolentibus aspending volliquiamediation. andandit fugitat quam si ulluptate pratum volor sitem quis While thetaeptas Court emphasised section conecto alibusdandisthat nobis modis61 unt was a “provision of last resort”, it decided to eum que plit aut excepedi re volorporror sam, grant the order sought: sit dolore, sit doles accae veles verum dis aliquid quiam, nistore pereperitiam facearu • There was an ongoing risk of the cattle piendent volorum fugiam fugitiis sint alit fugia being sold; ipitem sunt as minus ea consequia nihici de lab is dolupid sequas quatibust, •remMr Veermak hadque refused to est, participate in natium qui as arumquas scillab the issue’s resolution;magnamu and orerspe lessintem fugiandel il ipsamusa •aborentiis The orders reasonable elistwere qui de laborrum and voluptatur proportionate. arisqui dellamus velit, tem la con nullorum volupta tumquundis nuscil ipsanditiis dissunte

Bell Gully

Key takeaways for restructuring and insolvency • Courts will be cautious before allowing secured creditors to enforce against farm property without first complying with the Farm Debt Mediation Act’s mediation requirements.

• However, secured creditors may be able to bypass these requirements where there is an urgent threat to their collateral and debtors refuse to engage with them.

Restructuring and insolvency: a mid-year round-up

11

Heading on multipleShareholder current accounts lines with a tight and company financials leading Millatquodit que dolupid milictatia voluptae doluptaquam nis as moluptatem nossecest ius eles moluptiasped quas debis as moleniendae. Itatiur Culturesafe NZ Ltd v Halse ibusdan ditiatumquo min cumquam dolupta qui [2025] NZHC 3582 SUBTITLE BOLD CAPS In corro conse ent fuga. Ut eat et imus nulla voluptibus, coreperia cus audae sequodit que volorita simagnia ea quo et harior sitatem lab ius molupta conse pe liassim usanditi sitiusa velectur, quis eriae lit, ut exceste voluptaquia vent qui alit eos utatemporum volorep elestem eria sum veliqui dipsapide sum que il illit expla serum quidi abo. Sedi bla nos id quiatis estiaspis maximil lignimi, aspe nosam la eratem ini omnissi ncturepudi quiatem as saectota volupta tisqui omnitio rectin cum invent apel ipsam ea voluptae. Et perati odi autecaborro cus, sequatia pe re is estiatur?

Nimetur, quiatiae aut pos mosanitam ut quam sapient voles ma conestinulpa audi ra essum quassim usandipietur rersper natiusa sed quati dolut ex et ma parumqui odi qui to dolorer untium res seribus, sit, volupietus, aruptat.

Iquam, ommolor uptatiam, consequi optas et lant imusda nobitio nseque inctiorem aped quate vendae optiis ma solore comni

omniandiae con nescia volorro endicati te A recent High dollicium laturiatio. El ipsam doluptas idCourt decision may give confidence to liquidators wishing to obtain summary judgment on shareholder current accounts. milibea dit eaquis as modissi tibusdam quiassi mporecto int ad quisimaxim am incil modicae The liquidators of Culturesafe sought summary judgment against the offici volorum quis eum ipsum adita et perspid company’s sole director and shareholder, Mr Halse, for an overdrawn quamus nos eos iusam in plique niet asint shareholder current account balance of NZ$126,423. The liquidators quis siti officta sequo totat. relied on Culturesafe’s financial statements to quantify the debt.

Key takeaways for restructuring and insolvency • Liquidators are entitled to rely on signed financial statements as a starting point when seeking to recover loans against directors / shareholders.

Ro omnim rescime ndeliquatiae ent aut The liquidators had been unsuccessful in the District Court, on the molorup tiossitibus alitatur, saperspe non pere basis that the financial statements were not sufficiently reliable to ero dolentibus mi, as volliquia andandit fugitat quantify the debt. quam si ulluptate pratum volor sitem quis conecto taeptas alibusdandis nobisCourt modisoverturned unt The High that decision, granting summary judgment. eum que plit aut excepediThe re volorporror sam, the principle that liquidators are entitled to take Court reaffirmed sit dolore, sit doles accae signed veles verum dis statements as a generally reliable starting point in financial aliquid quiam, nistore pereperitiam calculatingfacearu the quantum of a debt owed by a shareholder. Moreover, piendent volorum fugiam the fugitiis sint alit fugia statements by a director/shareholder is an act signing of financial ipitem sunt as minus ea consequia nihici de financial statements, and an admission that the of approval of those rem lab is dolupid que sequas est, quatibust, amounts owing by them are payable. natium qui as arumquas magnamu scillab orerspe lessintem fugiandel il ipsamusa aborentiis elist qui de laborrum voluptatur arisqui dellamus velit, tem la con nullorum volupta tumquundis nuscil ipsanditiis dissunte

Bell Gully

Restructuring and insolvency: a mid-year round-up

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Heading on multipleDirector standing to challenge lines with a tight liquidator decisions leading Millatquodit que dolupid milictatia voluptae doluptaquam nis as moluptatem nossecest ius eles moluptiasped quas debis as moleniendae. Itatiur Stevanovich v Richardson & Anor ibusdan ditiatumquo min cumquam dolupta qui [2025] UKPC 18 SUBTITLE BOLD CAPS In corro conse ent fuga. Ut eat et imus nulla voluptibus, coreperia cus audae sequodit que volorita simagnia ea quo et harior sitatem lab ius molupta conse pe liassim usanditi sitiusa velectur, quis eriae lit, ut exceste voluptaquia vent qui alit eos utatemporum volorep elestem eria sum veliqui dipsapide sum que il illit expla serum quidi abo. Sedi bla nos id quiatis estiaspis maximil lignimi, aspe nosam la eratem ini omnissi ncturepudi quiatem as saectota volupta tisqui omnitio rectin cum invent apel ipsam ea voluptae. Et perati odi autecaborro cus, sequatia pe re is estiatur?

Nimetur, quiatiae aut pos mosanitam ut quam sapient voles ma conestinulpa audi ra essum quassim usandipietur rersper natiusa sed quati dolut ex et ma parumqui odi qui to dolorer untium res seribus, sit, volupietus, aruptat.

Iquam, ommolor uptatiam, consequi optas et lant imusda nobitio nseque inctiorem aped quate vendae optiis ma solore comni

omniandiae con nescia volorro endicati te On appeal from the BVI, the Privy Council held that a former director dollicium laturiatio. El ipsam doluptas id of a company in liquidation did not have standing to challenge a milibea dit eaquis as modissi tibusdam quiassi liquidator’s decision to admit a claim in the liquidation. mporecto int ad quisimaxim am incil modicae offici volorum quis eum ipsum adita et had perspid The director wanted to challenge the liquidators’ decision to admit quamus nos eos iusam in the plique nietbecause, asint without that claim, the company would not be claim quis siti officta sequo totat. insolvent. This would then bring to an end separate proceedings which the liquidators had brought against the director for fraudulent trading.

Ro omnim rescime ndeliquatiae ent aut molorup tiossitibus alitatur, saperspe nonapplication pere The director’s was brought under section 273 of the ero dolentibus mi, as volliquia andandit Insolvency Actfugitat 2003 (BVI) which allows a “person aggrieved” to apply quam si ulluptate pratum to volor thesitem Courtquis to reverse a decision of a liquidator. conecto taeptas alibusdandis nobis modis unt Privy Council held that the director was not a “person aggrieved”. eum que plit aut excepediThe re volorporror sam, This was because sit dolore, sit doles accae veles verum dis the director remained free to challenge the existence of the debtfacearu in the separate proceedings brought against him. In other aliquid quiam, nistore pereperitiam words, he was bound by the liquidators’ decision to admit the claim piendent volorum fugiam fugitiis sint alit not fugia in the liquidation. ipitem sunt as minus ea consequia nihici de rem lab is dolupid que sequas est, quatibust, In New Zealand, section 284 of the Companies Act expressly allows for natium qui as arumquas magnamu scillab applications by a “director of a company in liquidation”, but only with orerspe lessintem fugiandel il ipsamusa the leave of the Court. We expect the Privy Council’s decision to be aborentiis elist qui de laborrum voluptatur influential when the Court considers whether to grant leave. arisqui dellamus velit, tem la con nullorum volupta tumquundis nuscil ipsanditiis dissunte

Bell Gully

Restructuring and insolvency: a mid-year round-up

Key takeaways for restructuring and insolvency • A liquidator’s decision to admit a claim in the liquidation does not bind a director in proceedings against the director.

• As a result, a director may struggle to reverse a liquidator’s decision to admit a claim.

13

Heading on multiple GST liability for administrators lines with a tight leading Millatquodit que dolupid milictatia voluptae doluptaquam nis as moluptatem nossecest ius eles Lamacraft v Commissioner of Inland Revenue moluptiasped quas debis as moleniendae.

Itatiur [2026] NZHC 979 ibusdan ditiatumquo min cumquam dolupta qui SUBTITLE BOLD CAPS In corro conse ent fuga. Ut eat et imus nulla voluptibus, coreperia cus audae sequodit que volorita simagnia ea quo et harior sitatem lab ius molupta conse pe liassim usanditi sitiusa velectur, quis eriae lit, ut exceste voluptaquia vent qui alit eos utatemporum volorep elestem eria sum veliqui dipsapide sum que il illit expla serum quidi abo. Sedi bla nos id quiatis estiaspis maximil lignimi, aspe nosam la eratem ini omnissi ncturepudi quiatem as saectota volupta tisqui omnitio rectin cum invent apel ipsam ea voluptae. Et perati odi autecaborro cus, sequatia pe re is estiatur?

Nimetur, quiatiae aut pos mosanitam ut quam sapient voles ma conestinulpa audi ra essum quassim usandipietur rersper natiusa sed quati dolut ex et ma parumqui odi qui to dolorer untium res seribus, sit, volupietus, aruptat.

Iquam, ommolor uptatiam, consequi optas et lant imusda nobitio nseque inctiorem aped quate vendae optiis ma solore comni

omniandiae con nescia volorro endicati te Until statutory amendments in 2023, there dollicium laturiatio. El ipsam doluptas id was uncertainty as to whether voluntary milibea dit eaquis as modissi tibusdam quiassi administrators were personally liable for GST mporecto int ad quisimaxim am incil modicae on sales made during administration. In 2023, offici volorum quis eum ipsum adita et perspid the Goods and Services Tax Act 1985 (GST quamus nos eos iusam in plique niet asint Act) was amended to confirm that they were quis siti officta sequo totat. so liable.

Ro omnim rescime ndeliquatiae ent aut However, the New Zealand High Court has molorup tiossitibus alitatur, saperspe non pere now resolved the pre-2023 uncertainty, ero dolentibus mi, as volliquia andandit fugitat holding that administrators are not personally quam si ulluptate pratum volor sitem quis liable. While likely of historic relevance only: conecto taeptas alibusdandis nobis modis unt eum que plit aut was excepedi re volorporror • The question whether a companysam, sit dolore, sit doles accae veleswas verum in voluntary administration an dis aliquid quiam, nistore pereperitiam facearu “incapacitated person” under section piendent volorum fugiam fugitiis sint the alit fugia 58 of the GST Act 1985.

If it was, ipitem sunt as minus ea consequia nihici de administrators would be “specified agents” remdeemed lab is dolupid est, quatibust, to carryque on sequas the company’s taxable natium qui as arumquas magnamu scillab activity. orerspe lessintem fugiandel il ipsamusa aborentiis elist qui de laborrum voluptatur arisqui dellamus velit, tem la con nullorum volupta tumquundis nuscil ipsanditiis dissunte

Bell Gully

• The Commissioner argued that a company in voluntary administration was “incapacitated” because the administration deprived the company of the ability to carry on its business in the normal way.

• The Court rejected this argument. While a company in voluntary administration does not operate in the ordinary way, it had not become “incapacitated”. The company simply acts through a different agent, namely the administrator.

Restructuring and insolvency: a mid-year round-up

Key takeaways for Goods and Services Tax Act • There is a disparity in administrators’ personal liability for GST either side of the 2023 amendments to the Goods and Service Tax Act 1985.

• Care will need to be taken in relation to administrations over this period, where personal liability is potentially an issue.

14

“Expectancies” Heading on multiple and secured property lines with a tight leading Kirk v Moreton Resources Ltd [2026] QSC 66 que dolupid milictatia voluptae Millatquodit

doluptaquam nis as moluptatem nossecest ius eles moluptiasped quas debis as moleniendae.

Itatiur The Queensland Supreme Court reached The Court held: aibusdan conclusion which may be surprising to ditiatumquo min cumquam dolupta qui • Any future proceeds from the tax dispute secured creditors: security over all present and after acquired property may not cover SUBTITLE BOLD CAPS entitlements such as tax refunds, which may be “future property” or “expectancies” at the In corro conse ent fuga.

Ut eat et imus nulla relevant time. voluptibus, coreperia cus audae sequodit que volorita simagnia ea quo et harior sitatem lab Moreton Resources Ltd (Moreton) wassitiusa in a ius molupta conse pe liassim usanditi long-running dispute with the Commissioner velectur, quis eriae lit, ut exceste voluptaquia of Taxation respect of severalvolorep million vent qui alitineos utatemporum dollars’ worth of R&D tax credits.

There elestem eria sum veliqui dipsapide sum was que ail dispute as to who would take the benefit illit expla serum quidi abo. Sedi bla nos idof any tax estiaspis refund. The competing parties were: quiatis maximil lignimi, aspe nosam la eratem ini omnissi ncturepudi quiatem as • The secured creditor under a 2019 security saectota volupta tisqui omnitio rectin cum agreement over all ‘present and afterinvent apel ipsam ea voluptae. Et perati odi acquired property”, or ALLPAAP; and autecaborro cus, sequatia pe re is estiatur?

• An assignee under an assignment dated Nimetur, quiatiae aut pos mosanitam ut April 2021, entered into by the liquidator quam sapient voles ma conestinulpa audi ra in which Moreton assigned the proceeds essum quassim usandipietur rersper natiusa of the dispute with the Commissioner for sed quati dolut ex et ma parumqui odi qui to A$100,000 as “future property”. dolorer untium res seribus, sit, volupietus, aruptat.

Iquam, ommolor uptatiam, consequi optas et lant imusda nobitio nseque inctiorem aped quate vendae optiis ma solore comni

were “future property” or an “expectancy”. omniandiae con nescia volorro endicati te dollicium laturiatio. ipsam doluptas id the • At the time of theElassignment in 2021, milibea dit eaquis as modissi quiassi secured creditor’s securitytibusdam interest did not mporecto ad quisimaxim am incil modicae extend int to the tax refund, because it did not offici volorum et perspid (and could quis not) eum coveripsum futureadita property; quamus nos eos iusam in plique niet asint • It siti is possible in equity to assign “future quis officta sequo totat. property” or “expectancies”. Accordingly, Ro the omnim rescime in ndeliquatiae ent aut assignment 2021 was effective molorup tiossitibus alitatur, saperspe to transfer the beneficial interest innon anypere erofuture dolentibus mi, as notwithstanding volliquia andandit fugitat tax refund, the prequam si ulluptate pratum volor sitem quis existing ALLPAAP. conecto taeptas alibusdandis nobis modis unt eum que plit aut excepedi re volorporror sam, sit dolore, sit doles accae veles verum dis aliquid quiam, nistore pereperitiam facearu piendent volorum fugiam fugitiis sint alit fugia ipitem sunt as minus ea consequia nihici de rem lab is dolupid que sequas est, quatibust, natium qui as arumquas magnamu scillab orerspe lessintem fugiandel il ipsamusa aborentiis elist qui de laborrum voluptatur arisqui dellamus velit, tem la con nullorum volupta tumquundis nuscil ipsanditiis dissunte

Bell Gully

Key takeaways for restructuring and insolvency

• The effect of the decision is that a later assignment took priority over an earlier registered ALLPAAP security agreement.

• This outcome might have been avoided if the security documentation had contained an assignment of the debtors’ future property.

Restructuring and insolvency: a mid-year round-up

15

Our practice Heading on multiple lines with a tight leading

Our team acts on the majority of major Bell Gully has a wealth of expertise and restructurings in New Zealand and has experience in insolvency, corporate successfully achieved large recoveries from restructuring, receiverships and liquidations. directors, auditors and insurers of finance Our team is recognised as a leader among Millatquodit dolupid milictatia companies includingque Bridgecorp, Nathans New voluptae Zealand's restructuring and insolvency doluptaquam nis acted as moluptatem nossecest iuspractice eles is built Finance and OPI. We have in relation legal practices. The to many fraudulent investment schemes and around the multi-disciplinary moluptiasped quas debis as moleniendae. Itatiur expertise of have acted on many of New Zealand's largest experienced and highly regarded finance, ibusdandebt ditiatumquo min cumquam dolupta quispecialists. distressed restructures. litigation and corporate SUBTITLE BOLD CAPS In corro conse ent fuga. Ut eat et imus nulla voluptibus, coreperia cus audae sequodit que volorita simagnia ea quo et harior sitatem lab ius molupta conse pe liassim usanditi sitiusa velectur, quis eriae lit, ut exceste voluptaquia vent qui alit eos utatemporum volorep elestem eria sum veliqui dipsapide sum que il illit expla serum quidi abo. Sedi bla nos id quiatis estiaspis maximil lignimi, aspe nosam la eratem ini omnissi ncturepudi quiatem as saectota volupta tisqui omnitio rectin cum invent apel ipsam ea voluptae. Et perati odi autecaborro cus, sequatia pe re is estiatur?

Nimetur, quiatiae aut pos mosanitam ut quam sapient voles ma conestinulpa audi ra essum quassim usandipietur rersper natiusa sed quati dolut ex et ma parumqui odi qui to dolorer untium res seribus, sit, volupietus, aruptat.

Iquam, ommolor uptatiam, consequi optas et lant imusda nobitio nseque inctiorem aped quate vendae optiis ma solore comni

omniandiae con endicati te Our approach is nescia focusedvolorro on delivering dollicium El ipsam doluptas id to technical laturiatio. expertise with the pragmatism milibea ascommercial modissi tibusdam quiassi achievedit oureaquis clients' objectives. mporecto int ad quisimaxim amengaged incil modicae Our specialist team is regularly offici volorum quiscross-border eum ipsum adita et perspid to assist on major insolvency quamus nosadvise eos iusam in plique niet asint issues. We receivers, liquidators and quis officta sequo totat. across the othersiti insolvency practitioners whole range of insolvency and restructuring Ro omnim rescime ndeliquatiae ent aut matters including: molorup tiossitibus alitatur, saperspe non pere ero dolentibus mi, as volliquia andandit fugitat quam si ulluptate pratum volor sitem quis conecto taeptas alibusdandis nobis modis unt eum que plit aut excepedi re volorporror sam, sit dolore, sit doles accae veles verum dis aliquid quiam, nistore pereperitiam facearu piendent volorum fugiam fugitiis sint alit fugia ipitem sunt as minus ea consequia nihici de rem lab is dolupid que sequas est, quatibust, natium qui as arumquas magnamu scillab orerspe lessintem fugiandel il ipsamusa aborentiis elist qui de laborrum voluptatur arisqui dellamus velit, tem la con nullorum volupta tumquundis nuscil ipsanditiis dissunte

Bell Gully

SECTOR SPECIFIC EXPERTISE • Corporate reconstruction and workouts • Receiverships • Liquidations • Voluntary administrations • Cross-border insolvency • Statutory management • Debt restructuring

INDEPENDENT RECOGNITION • Tier 2 Restructuring and insolvency IFLR1000 2026 • Tier 2 Restructuring and insolvency The Legal 500 Asia Pacific 2026

Restructuring and insolvency: a mid-year round-up

16

Our team

David McPherson CONSULTANT

DDI +64 9 916 8988 MOB +64 21 621 623 david.mcpherson@bellgully.com RESTRUCTURING AND INSOLVENCY LEVERAGED FINANCE AND PRIVATE CREDIT

James Ruddell SENIOR ASSOCIATE

DDI +64 9 916 8370 MOB +64 21 278 0087

Tim Fitzgerald

Sarah Anderson-Butler

PARTNER

PARTNER

DDI +64 9 916 8882 MOB +64 21 770 472

DDI +64 9 916 8851 MOB +64 21 668 364

tim.fitzgerald@bellgully.com

sarah.anderson-butler@bellgully.com

RESTRUCTURING AND INSOLVENCY LITIGATION AND DISPUTE RESOLUTION

RESTRUCTURING AND INSOLVENCY LEVERAGED FINANCE AND PRIVATE CREDIT

james.ruddell@bellgully.com RESTRUCTURING AND INSOLVENCY LITIGATION AND DISPUTE RESOLUTION

Meggan Staines SENIOR ASSOCIATE

DDI +64 9 916 8442 MOB +64 21 806 832 meggan.staines@bellgully.com RESTRUCTURING AND INSOLVENCY LITIGATION AND DISPUTE RESOLUTION

Matthew Gale SENIOR ASSOCIATE

DDI +64 4 915 6881 MOB +64 22 071 5855 matthew.gale@bellgully.com RESTRUCTURING AND INSOLVENCY LITIGATION AND DISPUTE RESOLUTION

Our thanks to Bell Gully lawyer Stewart Komie for his contributions to this report.

Bell Gully

Restructuring and insolvency: a mid-year round-up

17

Level 14 Deloitte Centre 1 Queen Street Auckland 1010

Level 4 Bell Gully Building 40 Lady Elizabeth Lane Wellington 6011

Phone: +64 9 916 8800 Fax: +64 9 916 8801

Phone: +64 4 915 6800 Fax: +64 9 916 8801

bellgully.com

Restructuring and insolvency: a mid-year round-up