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
Until 2013, no circuit court of appeals had weighed in on the implications of the U.S. Supreme Court’s pronouncement in the 203 North LaSalle case that property retained by a junior stakeholder under a cram-down chapter 11 plan in exchange for new value “without benefit of market valuation” violates the “absolute priority rule.” See Bank of Amer. Nat’l Trust & Savings Ass’n v. 203 North LaSalle Street P’ship, 526 U.S. 434 (1999), reversing Matter of 203 North LaSalle Street P’ship, 126 F.3d 955 (7th Cir. 1997).
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