New South Wales Consolidated Acts

LOAN FUND COMPANIES ACT 1976 - SECT 72

72 Special provisions with respect to winding up of loan fund companies

(1) In its application to a loan fund company, the Companies (New South Wales) Code shall be read as if:

(a) after section 363 (1) the following sub-section had been inserted:

(1A) Without prejudice to the application of sub-section (1) to a loan fund company within the meaning of the Loan Fund Companies Act 1976 , such a company may be wound up under an order of the Court on the application of the Supervisor of Loan Fund Companies or on the application of the Supervisor of Loan Fund Companies and one or more of the parties specified in that sub-section.

(b) the word “or” had been omitted from section 364 (1) (h) where lastly occurring,

(c) the words “wound up.” had been omitted from section 364 (1) (j) and the words “wound up; or” had been inserted instead,

(d) after section 364 (1) (j), the following paragraph had been inserted:

(k) in the case of a loan fund company within the meaning of the Loan Fund Companies Act 1976 :

(i) the company has failed to lodge with the Supervisor of Loan Fund Companies any return or document required to be lodged with the Supervisor under section 23, or to comply with a notice served on the company under section 24, of that Act,

(ii) the company, if formed after the date of assent to that Act, does not, at the date of the making of the application to the Court to wind up the company, have assets (less current liabilities), valued at their current market value, of $5,000,000 or more, or

(iii) the Supervisor of Loan Fund Companies has, after holding an inquiry under Division 2 of Part 6 of that Act, reported that the Supervisor is of the opinion that the company cannot pay its debts and should be wound up, or that it is in the interests of the public or of the shareholders or of the creditors of the company or of persons who hold options to acquire loan entitlement shares in the company that the company should be wound up.

(e) after the words “ Securities Industry (New South Wales) Code ” in section 441 (j), the words “or pursuant to a direction given under section 55 (2) of the Loan Fund Companies Act 1976 ” had been inserted,

(f) after the words “wound up,” in section 442 (1), the words “or a direction given under section 55 (2) of the Loan Fund Companies Act 1976 is served on a loan fund company that is being wound up,” had been inserted,

(g) after the words “the order” in section 442 (1), the words “, or, as the case may be, the service of the direction” had been inserted,

(h) the word “or” had been omitted from section 470 (1) (c) (iii),

(i) the words “wound up.” had been omitted from section 470 (1) (c) (iv) (B) and the words “wound up; or” had been inserted instead, and

(j) after section 470 (1) (c) (iv), the following sub-paragraph had been inserted:

(v) if the company is operating, or managing, controlling or promoting the operation of, a loan fund scheme in contravention of section 12 of the Loan Fund Companies Act 1976 .

(2) If, on the winding up of a loan fund company, any surplus remains after all claims of creditors, both secured and unsecured, have been satisfied or provided for, other than claims of holders of shares in the company, and of options to acquire shares in the company, in relation to amounts paid up, or credited as paid up, in respect of those shares and options, the following provisions shall apply:

(a) the holders of shares, and of options to acquire loan entitlement shares, in the company shall, subject to subsections (3) and (4), be entitled to be repaid all amounts paid up, or credited as paid up, by them respectively in respect of those shares and options, and

(b) if, after making the repayments under paragraph (a), any part of the surplus remains, that part shall, subject to subsection (5), be distributed among the holders of shares, other than qualifying shares, in the company in proportion to the amounts paid up, or credited as paid up, by them respectively in respect of those shares.

(3) The holder of shares in a loan fund company, or of an option to acquire loan entitlement shares in a loan fund company, who, at the time repayments are to be made under subsection (2) (a), is in arrear in making payment of any call or instalment due in respect of those shares or, as the case may be, that option shall not be entitled to any repayment under subsection (2) (a).

(4) The amounts referred to in subsection (2) (a) shall rank equally between themselves and shall be paid in full, unless the surplus is insufficient to satisfy them, in which case they shall abate in equal proportions between themselves.

(5) The holder of shares in a loan fund company who, at the time a distribution is made under subsection (2) (b), is in arrear in making payment of any call or instalment due in respect of those shares shall not be entitled to participate in that distribution.

(6) Subsections (2) to (5) shall apply on the winding up of a loan fund company notwithstanding anything in the Companies (New South Wales) Code to the contrary.

(7) A reference in subsection (2) to an amount paid up, or credited as paid up, in respect of shares or options to acquire loan entitlement shares includes any premium paid, or credited as paid, in respect of those shares or options.