Regulatory Alerts2022-05-17
Reserve Bank of New Zealand Report on ACS (NZ) Limited Proposed Scheme of Arrangement
The Reserve Bank of New Zealand issued this report to inform creditors of ACS (NZ) Limited regarding the risks and implications of a proposed scheme of arrangement for insolvency resolution. The regulator highlights significant solvency concerns, noting a greater than 25% chance of asset shortages and potential non-compliance with new prudential standards, while warning that the scheme may result in unfair distributions compared to the pari-passu principle of liquidation. Although the Bank is not taking direct action to stop the scheme, it advises creditors that the proposal relies on inadequate capital injections and may disadvantage complex claimants, leaving the final decision to the creditors' vote.
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