Corporations Act. Australia
Each of the subsequent quarters are periods of 3 months. The trustee may allow a particular quarter to be a period of less than 3 months if the trustee is satisfied that special circumstances justify doing so.
Content of quarterly report
(4) The report for a quarter must include details of:
(a) any failure by the borrower and each guarantor to comply with the terms of the debentures or the provisions of the trust deed or this Chapter during the quarter; and
(b) any event that has happened during the quarter that has caused, or could cause, 1 or more of the following:
(i) any amount deposited or lent under the debentures to become immediately payable;
(ii) the debentures to become immediately enforceable;
(iii) any other right or remedy under the terms of the debenture or provisions of the trust deed to become immediately enforceable; and
(c) any circumstances that have occurred during the quarter that materially prejudice:
(i) the borrower, any of its subsidiaries, or any of the guarantors; or
(ii) any security interest included in or created by the debentures or the trust deed; and
(d) any substantial change in the nature of the business of the borrower, any of its subsidiaries, or any of the guarantors that has occurred during the quarter; and
(e) any of the following events that happened in the quarter:
(i) the appointment of a guarantor;
(ii) the cessation of liability of a guarantor body for the payment of the whole or part of the money for which it was liable under the guarantee;
(iii) a change of name of a guarantor (if this happens, the report must also disclose the guarantor’s new name); and
(f) the net amount outstanding on any advances at the end of the quarter if the borrower has created a security interest where:
(i) the total amount to be advanced on the security of the security interest is indeterminate; and
(ii) the advances are merged in a current account with bankers, trade creditors or anyone else; and
(g) any other matters that may materially prejudice any security interests or other interests of the debenture holders.
Note: Paragraph (f) — the borrower has a duty to inform the trustee about security interests as they are created (see section 283BE).
(5) If the borrower has deposited money with, or lent money to, a related body corporate during the quarter, the report must also include details of:
(a) the total of the money deposited with, or lent to, the related body corporate during the quarter (see subsection (7)); and
(b) the total amount of money owing to the borrower at the end of the quarter in respect of the deposits or loans to the related body corporate.
Disregard any amount that the borrower deposits with an ADI in the normal course of the borrower’s business.
(6) If the borrower has assumed a liability of a related body corporate during the quarter, the report must also include details of the extent of the liability assumed during the quarter and the extent of the liability as at the end of the quarter.
(7) For the purposes of subsections (5) and (6), the report:
(a) must distinguish between deposits, loans and assumptions of liability that are secured and those that are unsecured; and
(b) may exclude any deposit, loan or assumption of liability on behalf of the related body corporate if it has:
(i) guaranteed the repayment of the debentures of the borrower; and
(ii) secured the guarantee by a security interest over all of its property in favour of the trustee.
Formalities
(8) The report must:
(a) be made in accordance with a resolution of the directors; and
(b) specify the date on which the report is made.
283BG Exceptions to borrower’s duty to report to trustee and ASIC
Section 283BF does not apply in respect of:
(a) a borrower, while:
(i) it is under external administration; or
(ii) a receiver, or a receiver and manager, of property of the borrower has been appointed and has not ceased to act under that appointment; or
(b) a security interest in PPSA retention of title property.
283BH How debentures may be described
(1) The borrower may describe or refer to the debentures in:
(a) any disclosure in relation to the offer of the debentures; or
(b) any other document constituting or relating to the offer of the debentures; or
(c) the debentures themselves;
only in accordance with the following table:
How debentures may be described
Item
Description
When description may be used
1
mortgage debenture
only if the circumstances set out in subsection (2) are satisfied
2
debenture
only if the circumstances set out in subsection (2) or (3) are satisfied
3
unsecured note or unsecured deposit note
in any other case
(1A) The borrower commits an offence if it intentionally or recklessly contravenes subsection (1).
When debentures can be called mortgage debentures or debentures
(2) The borrower may describe or refer to the debentures as:
(a) mortgage debentures; or
(b) debentures;
if:
(c) the repayment of all money that has been, or may be, deposited or lent under the debentures is secured by a first mortgage given to the trustee over land vested in the borrower or in any of the guarantors; and
(d) the mortgage has been registered, or is a registrable mortgage that has been lodged for registration, in accordance with the law relating to the registration of mortgages of land in the place where the land is situated; and
(e) the total amount of that money and of all other liabilities (if any) secured by the mortgage of that land ranking equally with the liability to repay that money does not exceed 60 % of the value of the borrower’s or guarantor’s interest in that land as shown in the valuation included in the disclosure document for the debentures.
When debentures can be called debentures
(3) The borrower may describe or refer to the debentures as debentures if:
(a) the repayment of all money that has been, or may be, deposited or lent under the debentures has been secured by a security interest in favour of the trustee over the whole or any part of the tangible property of the borrower or of any of the guarantors; and
(b) the tangible property that constitutes the security for the security interest is sufficient and is reasonably likely to be sufficient to meet