Singleton, in the matter of Lehman Brothers Australia Limited (in Liq) [2011] FCA 1068

Singleton, in the matter of Lehman Brothers Australia Limited (in Liq) [2011] FCA 1068

Because the liquidators were in a very difficult position involving uncertain insurance recoveries, potentially insufficient policy proceeds, unresolved contingent claims, and possible priority issues under s 562 of the Corporations Act 2001 (Cth) and s 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW), and because their current approach appeared practicable and fair to protect the affected creditors, it was appropriate to direct that they were justified in taking the steps described in the affidavit of Marcus William Ayres pending a reasonable opportunity to consider the Court's reasons in the Wingecarribee proceedings.

Jurisdiction
Australia
Judgment Date
02 September 2011
Procedural Posture
Application by Liquidators for Advice and Directions Under S 479 of the Corporations Act 2001 (cth) / Directions in Liquidation Proceedings
Outcome
Application granted; liquidators given directions and costs ordered to be costs in the winding up.
Legal Topics
['court Directions to Liquidators' 'competing Creditor Priorities' 'insurance Proceeds in Liquidation' 'contingent Creditors']
['corporations Law' 'insolvency' 'insurance'] ['court Directions to Liquidators' 'competing Creditor Priorities' 'insurance Proceeds in Liquidation' 'contingent Creditors']

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Procedural Posture

Application by Liquidators for Advice and Directions Under S 479 of the Corporations Act 2001 (cth) / Directions in Liquidation Proceedings

Legal Issues

  1. 1 ['Whether the liquidators should be justified under s 479 of the Corporations Act 2001 (Cth) in continuing steps to manage potentially competing priorities between the general body of creditors and classes of contingent creditors in respect of insurance moneys.' 'Whether potential issues arising under s 562 of the Corporations Act 2001 (Cth) and s 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) warranted directions pending judgment in the Wingecarribee proceedings.']

Ratio Decidendi

Because the liquidators were in a very difficult position involving uncertain insurance recoveries, potentially insufficient policy proceeds, unresolved contingent claims, and possible priority issues under s 562 of the Corporations Act 2001 (Cth) and s 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW), and because their current approach appeared practicable and fair to protect the affected creditors, it was appropriate to direct that they were justified in taking the steps described in the affidavit of Marcus William Ayres pending a reasonable opportunity to consider the Court's reasons in the Wingecarribee proceedings.

Court Disposition

Application granted; liquidators given directions and costs ordered to be costs in the winding up.

Orders

  • ["Pursuant to s 479(3) of the Corporations Act 2001 (Cth), and pending a reasonable opportunity to consider the Court's reasons for judgment in proceedings NSD 2492 of 2007, the applicants are justified in taking the steps currently being taken to manage potentially competing priorities between the general body of...