In the matter of Shepherds Producers Co-Operative Ltd (in liq) [2012] NSWSC 390

In the matter of Shepherds Producers Co-Operative Ltd (in liq) [2012] NSWSC 390

The statutory criteria under s 564 are met because the property recovered was protected and preserved by the creditors' funding at critical risk, and the entirety of available funds should be distributed preferentially among the funding creditors, as their risk and contributions directly enabled the recoveries; no other creditors opposed and the proposed distribution is modest but proportionate to the risk taken.

Jurisdiction
Australia
Judgment Date
19 March 2012
Procedural Posture
Interlocutory Application / Judgment on Application for Preferential Payment Orders in Winding Up
Outcome
Orders made in favour of funding creditors for preferential payment; costs to be costs in the winding up.
Legal Topics
['winding Up' 'preferential Payment' "liquidators' Powers" 'creditor Funding' 'section 564 Corporations Act']
['corporations Law' 'insolvency'] ['winding Up' 'preferential Payment' "liquidators' Powers" 'creditor Funding' 'section 564 Corporations Act']

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Procedural Posture

Interlocutory Application / Judgment on Application for Preferential Payment Orders in Winding Up

Legal Issues

  1. 1 ["Whether creditors who funded liquidators' preliminary examinations are entitled to preferential payment of net settlement proceeds under s 564 of the Corporations Act 2001 (Cth)"]

Ratio Decidendi

The statutory criteria under s 564 are met because the property recovered was protected and preserved by the creditors' funding at critical risk, and the entirety of available funds should be distributed preferentially among the funding creditors, as their risk and contributions directly enabled the recoveries; no other creditors opposed and the proposed distribution is modest but proportionate to the risk taken.

Court Disposition

Orders made in favour of funding creditors for preferential payment; costs to be costs in the winding up.

Orders

  • ["Declaration that each creditor listed in Schedule 'A' to the Originating Process is entitled to preferential payment of all net settlement proceeds received and presently available in the winding up, being amounts shown in Schedule 'A'." "Order that the liquidators pay each of those creditors the amounts listed in...