In the matter of Kimberley Diamond Company Pty Ltd (in liq) (ACN 061 899 634) [2017] NSWSC 538

In the matter of Kimberley Diamond Company Pty Ltd (in liq) (ACN 061 899 634) [2017] NSWSC 538

It is sufficient for the exercise of the Court's discretion under s 459A to convert a creditors' voluntary winding up to a court-ordered winding up that there is a rational possibility that making the order would enable proceedings under s 588FJ which might provide potential benefits to the general body of creditors; it is not necessary for the Court to determine the merits of the foreshadowed claim at this stage.

Jurisdiction
Australia
Judgment Date
05 May 2017
Procedural Posture
Corporate Insolvency/winding Up Application / Application to Convert Creditors' Voluntary Winding Up to Court Ordered Winding Up
Outcome
Application granted; voluntary winding up converted to court-ordered winding up in insolvency; liquidators appointed; specified procedural requirements dispensed with.
Legal Topics
['conversion of Voluntary Liquidation to Court Ordered Winding Up' 'section 459 a Corporations Act' 'liquidator Standing' 'section 588 FJ Claims' 'circulating Security Interests']
['corporations Law' 'insolvency'] ['conversion of Voluntary Liquidation to Court Ordered Winding Up' 'section 459 a Corporations Act' 'liquidator Standing' 'section 588 FJ Claims' 'circulating Security Interests']

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Procedural Posture

Corporate Insolvency/winding Up Application / Application to Convert Creditors' Voluntary Winding Up to Court Ordered Winding Up

Legal Issues

  1. 1 ["Whether the Court should order a conversion of a creditors' voluntary winding up to a court-ordered winding up under s 459A of the Corporations Act" 'Whether the availability of a claim under s 588FJ of the Corporations Act to set aside a circulating security interest constitutes sufficient justification for such a conversion' 'Whether the security deed between KDC and KDL creates a circulating security interest within the meaning of the Corporations Act and PPSA']

Ratio Decidendi

It is sufficient for the exercise of the Court's discretion under s 459A to convert a creditors' voluntary winding up to a court-ordered winding up that there is a rational possibility that making the order would enable proceedings under s 588FJ which might provide potential benefits to the general body of creditors; it is not necessary for the Court to determine the merits of the foreshadowed claim at this stage.

Court Disposition

Application granted; voluntary winding up converted to court-ordered winding up in insolvency; liquidators appointed; specified procedural requirements dispensed with.

Orders

  • ['That pursuant to s 459A of the Corporations Act 2001 (Cth), Kimberley Diamond Company Pty Ltd (in liq) be wound up in insolvency.' 'That Sule Arnautovic and Christopher Michael Williamson be appointed joint and several liquidators of the Company.' 'Pursuant to s 472(6) of the Corporations Act, declare that...