Krejci, in the matter of Union Standard International Group Pty Ltd (Administrators Appointed) (No 3) [2020] FCA 1109

Krejci, in the matter of Union Standard International Group Pty Ltd (Administrators Appointed) (No 3) [2020] FCA 1109

The administrators were entitled to the direction because Mr Soe had notice of the prior orders but did not furnish administrator access to the servers, USG Holdings could not itself provide that access and was controlled by Mr Soe, administrator access to the platforms was insufficient, the rebooting option was no longer available, and the administrators had exhausted all other options while requiring server access to prevent potentially serious continuing losses to the company.

Jurisdiction
Australia
Judgment Date
04 August 2020
Procedural Posture
Application by Administrators for Directions Under S 90 15 of the Insolvency Practice Schedule / Hearing on 4 August 2020
Outcome
Direction granted; orders 5, 6 and 7 of 31 July 2020 vacated; costs submissions timetable ordered.
Legal Topics
['voluntary Administration' "administrators' Directions" 'access to Company Servers' 'non Compliance With Court Orders' 'insolvency Practice Schedule S 90 15']
['corporations' 'corporate Insolvency'] ['voluntary Administration' "administrators' Directions" 'access to Company Servers' 'non Compliance With Court Orders' 'insolvency Practice Schedule S 90 15']

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Procedural Posture

Application by Administrators for Directions Under S 90 15 of the Insolvency Practice Schedule / Hearing on 4 August 2020

Legal Issues

  1. 1 ['Whether the administrators would be justified in directing Beeks Financial Cloud Limited to physically turn off the servers licensed to the company or collect the physical hard drives of those servers.' 'Whether administrator access to the platforms was sufficient, or whether administrator access to the servers was required.' "Whether USG Holdings' opposition based on potential losses to it and third parties should prevent the direction being made." 'Whether alternative means of obtaining server access, including rebooting the servers, remained available.']

Ratio Decidendi

The administrators were entitled to the direction because Mr Soe had notice of the prior orders but did not furnish administrator access to the servers, USG Holdings could not itself provide that access and was controlled by Mr Soe, administrator access to the platforms was insufficient, the rebooting option was no longer available, and the administrators had exhausted all other options while requiring server access to prevent potentially serious continuing losses to the company.

Court Disposition

Direction granted; orders 5, 6 and 7 of 31 July 2020 vacated; costs submissions timetable ordered.

Orders

  • ['The first applicant would be justified in directing Beeks Financial Cloud Limited to physically turn off the servers licensed to the second applicant and/or to collect the physical hard drive of the servers licensed to the second applicant from the location of each server.' 'Orders 5, 6 and 7 of 31 July 2020 are...