Application of Robert William Whitton (as liquidator of Global Gossip group of companies) [2006] NSWSC 163

Application of Robert William Whitton (as liquidator of Global Gossip group of companies) [2006] NSWSC 163

Because the proceeds of sale belonged to the companies whose assets were sold, and because there was no effective apportionment by the vendors, no continuing deed provision governing distribution, no creditor resolution expressly supporting consolidation, and no lawful pooling arrangement or difficulty making separate administration impossible, the proceeds had to be apportioned to GG Australia, GG Worldwide and GG Victoria by reference to the value of their respective assets at liquidation, ignoring inter-company loans.

Jurisdiction
Australia
Judgment Date
20 March 2006
Procedural Posture
Liquidator's Application for Directions in Creditors' Voluntary Winding Up / Application for Directions as to Apportionment of Proceeds of Sale of Assets Amongst Companies in Liquidation
Outcome
Direction that the liquidator would be justified in apportioning the proceeds of sale to the group companies whose assets were sold, in proportion to their respective values, rather than to the group companies with priority employee creditors.
Legal Topics
["creditors' Voluntary Winding Up" "liquidator's Directions" 'apportionment of Sale Proceeds' 'priority Employee Creditors' 'corporate Group Pooling']
['corporations' 'insolvency'] ["creditors' Voluntary Winding Up" "liquidator's Directions" 'apportionment of Sale Proceeds' 'priority Employee Creditors' 'corporate Group Pooling']

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Procedural Posture

Liquidator's Application for Directions in Creditors' Voluntary Winding Up / Application for Directions as to Apportionment of Proceeds of Sale of Assets Amongst Companies in Liquidation

Legal Issues

  1. 1 ['Whether proceeds of sale of assets held within the Global Gossip Group should be apportioned so as to achieve equal rateable distribution to all priority employee creditors of the group companies.' 'Whether the proceeds should instead be apportioned to the group companies whose assets were sold, in proportion to the value of their respective assets.' "Whether directors' intentions, creditor expectations, group membership, or a single asset sale agreement justified disregarding separate company ownership in the absence of a lawful pooling arrangement."]

Ratio Decidendi

Because the proceeds of sale belonged to the companies whose assets were sold, and because there was no effective apportionment by the vendors, no continuing deed provision governing distribution, no creditor resolution expressly supporting consolidation, and no lawful pooling arrangement or difficulty making separate administration impossible, the proceeds had to be apportioned to GG Australia, GG Worldwide and GG Victoria by reference to the value of their respective assets at liquidation, ignoring inter-company loans.

Court Disposition

Direction that the liquidator would be justified in apportioning the proceeds of sale to the group companies whose assets were sold, in proportion to their respective values, rather than to the group companies with priority employee creditors.

Orders

  • ['The net proceeds of sale are to be allocated between GG Australia, GG Worldwide and GG Victoria in the proportions that the value of their respective assets at liquidation, ignoring inter-company loans, bear to the combined value of those assets.' 'The liquidator is to prepare revised short minutes of orders to...