BANKRUPTCY ACT 1966 - SECT 185EC Acceptance of a debt agreement proposal

BANKRUPTCY ACT 1966 - SECT 185EC

Acceptance in writing

  (1)   A debt agreement proposal is accepted if:

  (a)   the Official Receiver writes to affected creditors of a debtor under section   185EA; and

  (b)   a majority in value of the creditors who reply before the applicable deadline state that the proposal should be accepted.

  (1A)   For the purposes of paragraph   (1)(b), disregard an affected creditor who:

  (a)   is the proposed administrator; or

  (b)   was, on becoming an affected creditor, a related entity of the proposed administrator.

Timing of acceptance

  (2)   A debt agreement proposal that is accepted under subsection   (1) is taken to be accepted at the applicable deadline.

Value of a creditor

  (3)   In assessing, for the purposes of paragraph   (1)(b), the value of a creditor who is a related entity of the debtor, any debt that was assigned to the creditor is taken to have a value equal to the value of the consideration that the creditor gave for the assignment.

  (4)   For the purposes of paragraph   (1)(b), the value of a creditor is to be assessed as at the time when the acceptance of the debt agreement proposal for processing was recorded on the National Personal Insolvency Index.

  (5)   For the purposes of paragraph   (1)(b), a secured creditor is taken to be a creditor only to the extent (if any) by which the amount of the debt owing to the creditor exceeds the value of the creditor's security.

Offence

  (6)   A person commits an offence if:

  (a)   the person is the proposed administrator in relation to a debt agreement proposal; and

  (b)   the person gives, or agrees or offers to give, to an affected creditor any valuable consideration; and

  (c)   the person does so with the intention of securing the affected creditor's acceptance or non - acceptance of the proposal.

Penalty for contravention of this subsection:   Imprisonment for 6 months.