Terminating DoCA's (Part 3) – Administrators' Casting Vote

Commissioner of State Revenue v McCabe (No. 2) [2024] FCA 662 ("McCabe")

IMO Academy Construction & Development Pty Limited [2024] NSWSC 808 ("Academy Construction")

Summary

Where there is a deadlock between the majority in value of creditors and those creditors with a majority in number on the vote for a DoCA, the administrator has a casting vote.

Terminating DoCA's (Part 2) – Unfair Prejudice or Injustice

Canstruct Pty Limited v Project Sea Dragon Pty Limited (No. 4) [2024] FCA 112 ("Canstruct")¹

Commissioner of State Revenue v McCabe (No. 2) [2024] FCA 662 ("McCabe")

Academy Construction & Development Pty Limited [2024] NSWSC 808 ("Academy Construction")

Deeds of Company Arrangement – Insured Claims

Destination Brisbane Consortium Integrated Resort Operations Pty Ltd as Trustee v PCA (Qld) Pty Ltd (subject to a Deed of Company Arrangement) [2024] QSC 178 ("Destination Brisbane")

In Destination Brisbane two questions, which concerned the entitlements of insured creditors under a DoCA, arose for consideration in the context of an application for judicial advice:

Pooling Orders: Use of Property in a Joint Business

Morgan v McMillan Investment Holdings Pty Ltd [2024] HCA 33("McMillan")

"Where two or more related companies have engaged in a common business enterprise and are being wound up in insolvency, it may be appropriate in certain circumstances for the separate entities of the companies to be disregarded so that they are wound up together as if they were the one company." Harmer Report [854]

This week’s TGIF considers a recent decision of the Supreme Court of New South Wales (Forex Capital Trading Pty Ltd (in liquidation) v Invesus Group Limited [2024] NSWSC 867). Justice Ball determined that admission of a proof of debt by a liquidator was not akin to a judgment or settlement, and that such an admission did not create a new liability of the company.

Restructuring Corporate Groups: Transferring Employees under a Scheme

Intersnack Mid Co Pty Ltd(No. 2) [2024] NSWSC 9 ("Intersnack")

Restructuring or consolidating corporate groups may involve a new or different company in the group employing staff. In such a case an order can be made under s 413, Corporations Act ("CA") giving effect to that arrangement including where the staff are employed under an enterprise agreement.

Special Purpose Vehicles ("SPVs") – Financing Arrangements

Canstruct Pty Limited v Project Sea Dragon Pty Limited (No. 4) [2024] FCA 112 ("Canstruct")

SPVs are typically incorporated to undertake particular projects either for their holding company or on behalf of joint venturers. The arrangements made to fund the operations of SPVs can have implications for both their directors and their shareholders.

In a recent decision of the Supreme Court of New South Wales (In the matter of Pacific Plumbing Group Pty Limited (in liquidation) [2024] NSWSC 525), Justice Black determined that a payment made by a third party was not an unfair preference because the payment did not diminish assets available to creditors.

Key Takeaways

Due Diligence by Voluntary Administrators in respect of their Appointment

Robust Construction Services Pty Ltd [2023] NSWSC 1156 ("Robust")

DoCA's: What Claims can be Released?

PK Riddell Investments Pty Ltd v Upwards Up And Gone Pty Ltd [2024] VSC 159 ("Riddell Investments")