This decision is a testament to the flexibility of schemes of arrangement in Australia as a means of effecting settlements with a company’s creditors as well as third parties such as the company’s insurers. The Federal Court also demonstrated its propensity to take a liberal interpretation of what constitutes a “compromise or arrangement” to enliven its jurisdiction to convene a meeting of creditors for the purpose of considering a proposed scheme of arrangement.

Administrators will note with concern the decision of the East London Employment Tribunal in Spencer v Lehman Brothers (in administration) and Others, which suggests that administrators can be held to be personally liable for the discrimination of employees of the business in administration.