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When will courts pull the plug? Understanding the termination of a Deed of Company Arrangement under section 445D(1)(g) of the Corporations Act 2001 (Cth)

When will a Court terminate a Deed of Company Arrangement (DOCA) for ‘some other reason’ under section 445D(1)(g) of the Corporations Act 2001 (Cth) (”the Act”)? In two recent cases, two separate courts have shed light on whether, and when, ‘public interest’ serves as a compelling reason to terminate a DOCA.

Yan v The Won Capital Pty Ltd [2024] NSWSC 758

Facts

In December 2017, Mr Yan loaned $10 million to GR Capital. In October 2018, GR Capital appointed administrators who reported to creditors the preliminary view that GR Capital had been insolvent since at least December 2017. Despite the administrators’ recommendations against the DOCA, creditors resolved on 30 January 2019 that GR Capital execute a holding DOCA allowing time to complete a property development before creditors could take action against GR Capital. Mr Yan commenced proceedings seeking termination of the DOCA under section 445D(1) of the Act to allow a liquidator to investigate insolvent trading claims. Mr Yan offered to provide funding to the liquidator for the investigations. As the limitation period on any insolvent trading claim was about to expire, it became urgent whether the DOCA was to be terminated and a liquidator appointed. [...]  READ MORE →

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Fighting the Rearguard Action – s 459S and Winding Up Applications

By Jacob Reardon a Solicitor of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

In an application to wind up a company for failure to comply with a statutory demand, section 459S of the Corporations Act 2001 (Cth) (“the Act”) operates to exclude grounds that a defendant either did rely on, or could have relied on, in an earlier application to set aside a statutory demand.

In the Explanatory Memorandum to the Corporate Law Reform Bill 1992, the stated policy goal of section 459S is to: [...]  READ MORE →

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The House that Estoppel Built?

The full version of this article was originally published in the Lexis Nexis Insolvency Law Bulletin

By Jacob Reardon, solicitor, and Stephen Mullette, Principal, Matthews Folbigg Lawyers

How long does a bankruptcy trustee have to sell a bankrupt’s home? What if the Trustee allows the bankrupt to live in the property, and pay the mortgage, council, and water rates, and repair the property for almost 5 years? Or for 8 years? More? Will the Trustee eventually become estopped from selling the property after such a long period? The answer may surprise. [...]  READ MORE →

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Standing to Stay?

By Aritree Barua, Solicitor at Matthews Folbigg Lawyers

Once a company has been wound up, it can be very difficult (but by no means impossible) to undo or even temporarily halt the winding up process. Only those with proper standing may even attempt such a feat.

In Sebie v ENA Development Pty Ltd (in liquidation) (Receiver Appointed), in the matter of ENA Development Pty Ltd [2023] FCA 2, the Federal Court of Australia (“the FC”) rejected an application made by Mr Robert Sebie (“Mr Sebie”) for a stay of the winding up of ENA Development Pty Ltd (“ENA”). [...]  READ MORE →