Ryan, in the matter of Kingsrose Mining Limited (Administrators Appointed) [2017] FCA 621

Ryan, in the matter of Kingsrose Mining Limited (Administrators Appointed) [2017] FCA 621

The Court was satisfied on the evidence that the proposed non-recourse convertible facility would allow Kingsrose Mining Limited to continue trading for the benefit of its creditors, that the creditors would not be prejudiced and were likely to benefit, including from the non-recourse nature of the facility, and that the proposed orders appropriately limited the administrators' liability to the extent of their right of indemnity out of the company's assets. It was therefore consistent with the objectives of Part 5.3A to make the orders under s 447A modifying the operation of s 443A.

Jurisdiction
Australia
Judgment Date
09 March 2017
Procedural Posture
Application for Order Pursuant to S 447 a to Vary the Liability of Administrators Under S 443 a of the Corporations Act 2001 (cth) / Ex Tempore Reasons for Judgment and Orders
Outcome
Application granted.
Legal Topics
['voluntary Administration' "administrators' Personal Liability" 'section 447 a Orders' 'non Recourse Convertible Facility Agreement' 'borrowing During Administration']
['corporations' 'corporate Insolvency'] ['voluntary Administration' "administrators' Personal Liability" 'section 447 a Orders' 'non Recourse Convertible Facility Agreement' 'borrowing During Administration']

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Procedural Posture

Application for Order Pursuant to S 447 a to Vary the Liability of Administrators Under S 443 a of the Corporations Act 2001 (cth) / Ex Tempore Reasons for Judgment and Orders

Legal Issues

  1. 1 ["Whether Part 5.3A of the Corporations Act 2001 (Cth) should operate in relation to Kingsrose Mining Limited so as to limit the administrators' liability for debts incurred under proposed Convertible Facility Agreements." "Whether the proposed borrowing arrangements were in the interests of Kingsrose Mining Limited's creditors and consistent with the objectives of Part 5.3A of the Corporations Act 2001 (Cth)."]

Ratio Decidendi

The Court was satisfied on the evidence that the proposed non-recourse convertible facility would allow Kingsrose Mining Limited to continue trading for the benefit of its creditors, that the creditors would not be prejudiced and were likely to benefit, including from the non-recourse nature of the facility, and that the proposed orders appropriately limited the administrators' liability to the extent of their right of indemnity out of the company's assets. It was therefore consistent with the objectives of Part 5.3A to make the orders under s 447A modifying the operation of s 443A.

Court Disposition

Application granted.

Orders

  • ['Pursuant to s 447A(1) of the Corporations Act 2001 (Cth), Part 5.3A of the Act is to operate in relation to Kingsrose Mining Ltd (Administrators Appointed) so that the liability of the applicants for repayment of moneys borrowed under loan agreements entered into by KRM with MJ Andrews or other third parties, in...