De Lorenzo v CXI Software Pty Ltd [2024] NSWDC 371

De Lorenzo v CXI Software Pty Ltd [2024] NSWDC 371

Although a liquidity event occurred in May 2020, shareholders' approval required by the Deed for conversion of debt to equity was not obtained; therefore, the Deed remains operative as a debt instrument, and Mr De Lorenzo is entitled to judgment for the principal and accrued interest.

Jurisdiction
Australia
Judgment Date
23 August 2024
Procedural Posture
Civil / Principal Judgment
Outcome
Judgment for the Plaintiff
Legal Topics
['convertible Notes' 'debt Conversion' "shareholders' Approval" 'interpretation of Contractual Terms']
['contract' 'banking and Finance'] ['convertible Notes' 'debt Conversion' "shareholders' Approval" 'interpretation of Contractual Terms']

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Procedural Posture

Civil / Principal Judgment

Legal Issues

  1. 1 ["Whether there was a 'liquidity event' under the convertible note deed" "Whether shareholders' approval for note conversion was obtained" 'Whether the debt obligation was converted to equity and extinguished']

Ratio Decidendi

Although a liquidity event occurred in May 2020, shareholders' approval required by the Deed for conversion of debt to equity was not obtained; therefore, the Deed remains operative as a debt instrument, and Mr De Lorenzo is entitled to judgment for the principal and accrued interest.

Court Disposition

Judgment for the Plaintiff

Orders

  • ['Judgment for the Plaintiff in the sum of $151,795.39, inclusive of interest up to 23 August 2024.' "The Defendant pay the Plaintiff's costs."]