In the matter of Adscaff Pty Limited [2013] NSWSC 1081

In the matter of Adscaff Pty Limited [2013] NSWSC 1081

There being reasonable commercial justification for the compromise, absence of bad faith or error, and the settlement being more favourable than the likely dividend in a winding up, Court approval under s 477(2A) and (2B) of the Corporations Act is appropriate. The deed, already performed, should not be invalid under s 1322(4)(a) despite lack of prior approval.

Jurisdiction
Australia
Judgment Date
08 July 2013
Procedural Posture
Corporations Application for Judicial Advice/approval to Liquidator / Application for Approval of Compromise and Declaration of Deed Validity
Outcome
Application granted for approval of compromise and declaration as to deed's validity
Legal Topics
['external Administration' 'judicial Advice to Liquidator' 'compromise With Creditor' 'approval of Compromise' 'validity of Deed']
['corporations Law'] ['external Administration' 'judicial Advice to Liquidator' 'compromise With Creditor' 'approval of Compromise' 'validity of Deed']

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Procedural Posture

Corporations Application for Judicial Advice/approval to Liquidator / Application for Approval of Compromise and Declaration of Deed Validity

Legal Issues

  1. 1 ['Whether the Court should approve the deed of compromise with Wyndham Holdings Pty Limited under Corporations Act s 477(2A) and (2B)' 'Whether the deed entered into without prior Court approval is invalid and if a declaration of its validity should be made under s 1322(4)(a)']

Ratio Decidendi

There being reasonable commercial justification for the compromise, absence of bad faith or error, and the settlement being more favourable than the likely dividend in a winding up, Court approval under s 477(2A) and (2B) of the Corporations Act is appropriate. The deed, already performed, should not be invalid under s 1322(4)(a) despite lack of prior approval.

Court Disposition

Application granted for approval of compromise and declaration as to deed's validity

Orders

  • ['Order approving the compromise pursuant to Corporations Act s 477(2A) and (2B)' 'Declaration pursuant to s 1322(4)(a) that the deed of 31 January 2013 is not invalid by reason of lack of prior Court approval' 'Costs of the application to be costs in the winding up']