Companies Act 2014 section 558ZH

General rule: liability of third person not affected by rescue plan

Section 558ZH establishes the general principle that a rescue plan for a small or micro company does not alter the liability of third parties who may also be responsible for a debt covered by the plan.

• A third party's liability for a debt is not reduced or changed simply because that debt is included in a confirmed rescue plan under the small and micro companies rescue process.
• However, the third party and the creditor may voluntarily agree between themselves that the third party's liability will be affected by the rescue plan.
• These protections do not apply where the third party is itself an eligible company that has had a process adviser appointed — in other words, where it is also going through its own rescue process.
• This section ensures that creditors retain their rights against guarantors and other third parties, preserving recourse beyond the company in rescue.