Open Telecommunications Ltd (Subject to Deed of Company Arrangement) [2003] NSWSC 1198

Open Telecommunications Ltd (Subject to Deed of Company Arrangement) [2003] NSWSC 1198

The proposed execution of a varied deed of company arrangement and creditors' trust deed raised a narrow issue of legality and propriety, not merely a request for reassurance about a commercial decision. Because the administrator firmly considered the scheme viable, creditors would have to approve it, creditors would be protected by the trust mechanism and fallback arrangements, and there was no objection on grounds of legality or propriety, directions under s 447D(1) were appropriate.

Jurisdiction
Australia
Judgment Date
03 December 2003
Procedural Posture
Application for Directions Under S 447 D of the Corporations Act 2001 (cth) by a Deed Administrator / Directions Application
Outcome
Directions given to the deed administrator.
Legal Topics
['voluntary Administration' 'deed of Company Arrangement' 'court Directions to Administrator' "creditors' Trust Deed" 'stock Exchange Restoration']
['corporations' 'insolvency' 'trusts'] ['voluntary Administration' 'deed of Company Arrangement' 'court Directions to Administrator' "creditors' Trust Deed" 'stock Exchange Restoration']

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Procedural Posture

Application for Directions Under S 447 D of the Corporations Act 2001 (cth) by a Deed Administrator / Directions Application

Legal Issues

  1. 1 ["Whether the deed administrator should receive directions under s 447D that he would be justified in executing and giving effect to a varied deed of company arrangement and a creditors' trust deed." "Whether the proposed course of moving sums promised to creditors from the deed of company arrangement to a creditors' trust deed raised issues of legality or propriety suitable for directions."]

Ratio Decidendi

The proposed execution of a varied deed of company arrangement and creditors' trust deed raised a narrow issue of legality and propriety, not merely a request for reassurance about a commercial decision. Because the administrator firmly considered the scheme viable, creditors would have to approve it, creditors would be protected by the trust mechanism and fallback arrangements, and there was no objection on grounds of legality or propriety, directions under s 447D(1) were appropriate.

Court Disposition

Directions given to the deed administrator.

Orders

  • ["Directions under s 447D(1) were given as asked, that the administrator would be justified in executing and giving effect to the proposed varied deed of company arrangement and creditors' trust deed."]