From cathropartners.com.au: Section 588FP of the Corporations Act 2001 (Cth) nullifies security interests granted by a company to its officers and related parties if enforced within six months without court approval, safeguarding creditor rights during insolvency.

This provision also includes restrictions that may inadvertently void legitimate financial arrangements, leading to potential delays and increased costs in external administration.

Courts may intervene to allow enforcement if it does not harm creditor interests, illustrating the balance between protecting creditors and acknowledging fair security arrangements.