Malanos [2007] NSWSC 865

Malanos [2007] NSWSC 865

The Court made the orders because the proposed funding and deferral arrangements were fundamentally financing mechanisms enabling the Company to continue trading and perform its outstanding contracts, which was likely to benefit creditors, and the urgency of the position made it impractical to seek creditor views before granting relief.

Jurisdiction
Australia
Judgment Date
19 July 2007
Procedural Posture
Corporations Application Under S 447 a of the Corporations Act 2001 (cth) / Ex Tempore Judgment
Outcome
Application granted; orders sought made.
Legal Topics
['voluntary Administration' 'administrator Personal Liability' 'funding Deed' 'section 447 a Order' 'continuation of Company Business as a Going Concern']
['corporations Law' 'insolvency Law'] ['voluntary Administration' 'administrator Personal Liability' 'funding Deed' 'section 447 a Order' 'continuation of Company Business as a Going Concern']

Case Brief

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Procedural Posture

Corporations Application Under S 447 a of the Corporations Act 2001 (cth) / Ex Tempore Judgment

Legal Issues

  1. 1 ['Whether Pt 5.3A of the Corporations Act 2001 (Cth) should operate in relation to the Company as if s 443A(1)(a) treated advances and other financial accommodation under the Funding Deed as debts incurred by the Administrator for services rendered.' 'Whether the Administrator should be relieved from personal liability under s 443A of the Act to the funder to the extent the property of the Company is insufficient after payment of other liabilities for which the Administrator may be personally liable.' 'Whether the proposed funding arrangements were to the benefit of creditors and justified urgently without first obtaining creditor views.']

Ratio Decidendi

The Court made the orders because the proposed funding and deferral arrangements were fundamentally financing mechanisms enabling the Company to continue trading and perform its outstanding contracts, which was likely to benefit creditors, and the urgency of the position made it impractical to seek creditor views before granting relief.

Court Disposition

Application granted; orders sought made.

Orders

  • ['Pt 5.3A of the Corporations Act 2001 (Cth) is to operate in relation to Lanmac Contracting Pty Limited (Administrator Appointed) as if s 443A(1)(a) provides that advances and other financial accommodation to be made by James Richard Clouten to the Plaintiff in his capacity as Administrator of the Company in...