The High Court this afternoon unanimously dismissed Clive Palmer and Ian Ferguson's challenge to the constitutional validity of section 596A of the Corporations Act.
This means that a liquidator's power to publicly examine and compel the production of documents remains intact and removes any doubt about the powers of liquidators under section 596A of the Corporations Act.
Arguments made by Clive Palmer and Ian Ferguson
Debt exchanges have long been utilized by distressed companies to address liquidity concerns and to take advantage of beneficial market conditions. A company saddled with burdensome debt obligations, for example, may seek to exchange existing notes for new notes with the same outstanding principal but with borrower-favorable terms, like delayed payment or extended maturation dates (a "Face Value Exchange"). Or the company might seek to exchange existing notes for new notes with a lower face amount, motivated by discounted trading values for the existing notes (a "Fair Value Exchange").
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