In the matter of FAI Film Distribution Pty Ltd; In the matter of FAI Films Pty Ltd [2014] NSWSC 1904

In the matter of FAI Film Distribution Pty Ltd; In the matter of FAI Films Pty Ltd [2014] NSWSC 1904

The agreements should be approved under s 477(2B) because their obligations (even of perpetual operation such as indemnities and confidentiality) do not unreasonably protract the winding up, are beneficial to creditors, and were entered subject to prior court approval; retrospective approval is also available in the circumstances.

Parties
Applicants: Anthony Gregory McGrath and Christopher John Honey in their capacity as liquidators of FAI Films Pty Limited (In Liquidation); Company: FAI Films Pty Limited (In Liquidation); Company: FAI Film Distribution Pty Ltd (In Liquidation); Purchaser: GernFully LLC; Other Party: Twentieth Century Fox
Jurisdiction
Australia
Judgment Date
06 August 2014
Procedural Posture
Corporations – Approval of Agreement by Liquidators / Application for Court Approval Under S 477(2 B) Corporations Act
Outcome
Approval granted to applicants under Corporations Act, s 477(2B) to enter the agreements
Legal Topics
Liquidation, Liquidator's Powers, Court Approval of Agreements, Section 477(2 B) Corporations Act
Corporations Liquidation Liquidator's Powers Court Approval of Agreements Section 477(2 B) Corporations Act

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Parties

Anthony Gregory McGrath and Christopher John Honey in their capacity as liquidators of FAI Films Pty Limited (In Liquidation)

Applicants

FAI Films Pty Limited (In Liquidation)

Company

FAI Film Distribution Pty Ltd (In Liquidation)

Company

GernFully LLC

Purchaser

Twentieth Century Fox

Other Party

Procedural Posture

Corporations – Approval of Agreement by Liquidators / Application for Court Approval Under S 477(2 B) Corporations Act

Legal Issues

  1. 1 Whether the proposed agreements by the liquidators require approval under s 477(2B) of the Corporations Act
  2. 2 Whether the agreements can be approved where execution was subject to conditions precedent
  3. 3 Whether retrospective approval is available

Ratio Decidendi

The agreements should be approved under s 477(2B) because their obligations (even of perpetual operation such as indemnities and confidentiality) do not unreasonably protract the winding up, are beneficial to creditors, and were entered subject to prior court approval; retrospective approval is also available in the circumstances.

Court Disposition

Approval granted to applicants under Corporations Act, s 477(2B) to enter the agreements

Orders

  • In proceedings 2003/0083562, approval granted to the liquidators of FAI Films Distribution Pty Ltd to enter into the sale agreement and the deed with GernFully LLC and Twentieth Century Fox.
  • In proceedings 2004/00182172, approval granted to the liquidators of FAI Films Pty Ltd to enter into the sale agreement with FAI Film Distribution Pty Ltd and GernFully LLC.