Section 588W — Corporations Act 2001 (Cth)

(1) Where:

(a) a corporation has contravened section 588V in relation to the incurring of a debt by a company; and

(b) the person to whom the debt is owed has suffered loss or damage in relation to the debt because of the company’s insolvency; and

(c) the debt was wholly or partly unsecured when the loss or damage was suffered; and

(d) the company is being wound up;

the company’s liquidator may recover from the corporation, as a debt due to the company, an amount equal to the amount of the loss or damage.

(2) Proceedings under this section may only be begun within 6 years after the beginning of the winding up.

Related sections

• s 588T — When creditor may sue for compensation without liquidator’s consent
• s 588U — Events preventing creditor from suing
• s 588V — When holding company liable
• s 588WA — Safe harbour—taking reasonable steps to ensure company’s directors have the benefit of the directors’ safe harbour
• s 588X — Defences about reasonable grounds, illness or reasonable steps
• s 588Y — Application of amount paid as compensation

Research how courts apply s 588W

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