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Albany and the Great Southern
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The role of statutory demands in securing payment of debts…

Often creditors and cannot secure payment of a debt against a company.

Many cred­i­tors will con­sid­er issu­ing a com­pa­ny with a statu­to­ry demand under sec­tion 459E of the Cor­po­ra­tions Act 2001 (Cth), which requires a debtor com­pa­ny to pay a debt it owes with­in 21 days.

If the debtor com­pa­ny fails to pay the debt, come to a suit­able arrange­ment with the cred­i­tor, or make an appli­ca­tion to set aside the statu­to­ry demand with­in that time peri­od, the com­pa­ny is pre­sumed to be insol­vent.

Once there is a pre­sump­tion of insol­ven­cy, it is then open to the cred­i­tor to com­mence pro­ceed­ings to wind up the debtor com­pa­ny and have a liq­uida­tor appointed.

However, there are many cases where a par­ty has been pun­ished with an adverse costs order for inap­pro­pri­ate­ly issu­ing a statu­to­ry demand where a clear gen­uine dis­pute existed.

See Springdale Legal to obtain sound legal advice and choose an appro­pri­ate way to resolve dis­putes, par­tic­u­lar­ly those which involve ques­tions of fact and the mean­ing and effect of con­tracts.

By | 2018-11-20T09:23:44+00:00 November 20th, 2018|Springdale News|Comments Off on The role of statutory demands in securing payment of debts…