Gould Bros & Co Pty Limited (Administrators Appointed), in the matter of Gould Bros & Co Pty Limited (Administrators Appointed) [2012] FCA 285

Gould Bros & Co Pty Limited (Administrators Appointed), in the matter of Gould Bros & Co Pty Limited (Administrators Appointed) [2012] FCA 285

The Court made the orders because the evidence showed urgent financial need, limited cash, a risk that the administrators' statutory indemnity would be insufficient, and a real possibility that continued trading funded by the proposed shareholder loans would enable investigation of a going-concern sale and produce a better return to creditors and members than immediate winding up. The orders were found to be consistent with the objectives of Pt 5.3A of the Corporations Act 2001 (Cth).

Jurisdiction
Australia
Judgment Date
22 March 2012
Procedural Posture
Corporations Administration Application Under S 447 A(1) of the Corporations Act 2001 (cth) / Application for Orders as to How Pt 5.3 a of the Corporations Act 2001 (cth) Is to Operate in Relation to the First Plaintiff
Outcome
Orders made under s 447A(1) of the Corporations Act 2001 (Cth).
Legal Topics
['voluntary Administration' "administrators' Personal Liability" "administrators' Indemnity" 'funding Deed' 'priority of Administration Debts']
['corporations Law' 'external Administration'] ['voluntary Administration' "administrators' Personal Liability" "administrators' Indemnity" 'funding Deed' 'priority of Administration Debts']

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Procedural Posture

Corporations Administration Application Under S 447 A(1) of the Corporations Act 2001 (cth) / Application for Orders as to How Pt 5.3 a of the Corporations Act 2001 (cth) Is to Operate in Relation to the First Plaintiff

Legal Issues

  1. 1 ['Whether Pt 5.3A of the Corporations Act 2001 (Cth) should operate so that money advanced by shareholder funders under a Funding Deed comprises debts incurred by the administrators in the performance and exercise of their functions and powers.' 'Whether the administrators should be relieved of personal liability to repay the funding debt to the extent their indemnity under s 443D of the Corporations Act 2001 (Cth) is insufficient.' 'Whether the funding debt should have priority equivalent to debts with priority under subsections 556(1)(a), (c), (dd) and s 560 of the Corporations Act 2001 (Cth).']

Ratio Decidendi

The Court made the orders because the evidence showed urgent financial need, limited cash, a risk that the administrators' statutory indemnity would be insufficient, and a real possibility that continued trading funded by the proposed shareholder loans would enable investigation of a going-concern sale and produce a better return to creditors and members than immediate winding up. The orders were found to be consistent with the objectives of Pt 5.3A of the Corporations Act 2001 (Cth).

Court Disposition

Orders made under s 447A(1) of the Corporations Act 2001 (Cth).

Orders

  • ['Pursuant to section 447A(1) of the Corporations Act 2001 (Cth), Part 5.3A of the Act is to operate in respect to the first plaintiff as if section 443A(1) provided that money advanced by way of loan from David Woodcock and Perry Shaddock pursuant to the Funding Deed comprises debts incurred by the second...