Part 14 – Too Much of a Compromise? Defining Classes for Creditor Compromise Approval

Abstract

In 2013, the Auckland High Court delivered New Zealand’s leading judgment on the compromise with creditors process set out in Part 14 of the Companies Act 1993. In particular, the Court considered the way in which different classes of creditors might be grouped together for the purposes of approving a compromise arrangement. This essay considers the cogency of the Court’s conclusion on the class issue. It concludes that the outcome was possibly incorrect and that the Part 14 process warrants some legislative clarification.