Companies Act 2014 section 558ZJ

Payment by third person to creditor post rescue period - statutory subrogation in favour of third person in certain circumstances

Section 558ZJ deals with what happens when a third party pays a creditor on behalf of a company after the rescue period has ended, and how that third party steps into the creditor's shoes to receive future payments under the rescue plan.

• This section applies where a third party makes a payment to a creditor in respect of a company's liability after the rescue period has expired
• Any amounts that would otherwise have been payable to the creditor under an active rescue plan are redirected to the third party
• The third party receives these redirected payments on the same terms and conditions as originally applied to the creditor under the rescue plan
• This mechanism is known as statutory subrogation — the third party legally takes over the creditor's right to receive payments under the plan