Sellers; in the matter of Beckley Forge Pty Ltd (Administrators Appointed) [2003] FCA 523
Section 437F does not prevent the issue of new shares during administration where the legal rights of existing shareholders are not changed, even if the value of their shares is diminished; thus, the proposed allotment is not struck down by s 437F.
- Parties
- Applicant: Kenneth Stewart Sellers; Applicant: Mathew Campbell Muldoon
- Jurisdiction
- Australia
- Judgment Date
- 16 May 2003
- Procedural Posture
- Corporations – Administration / Application for Order Under S 437 F Corporations Act 2001 (cth), Reasons for Judgment and Final Orders
- Outcome
- Application dismissed
- Legal Topics
- Administration of Insolvent Companies, Share Allotment During Administration, Section 437 F Corporations Act 2001 (cth)
Case Brief
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Parties
Kenneth Stewart Sellers
Applicant
Mathew Campbell Muldoon
Applicant
Procedural Posture
Corporations – Administration / Application for Order Under S 437 F Corporations Act 2001 (cth), Reasons for Judgment and Final Orders
Legal Issues
- 1 Whether s 437F of the Corporations Act 2001 (Cth) prevents a company under administration from issuing new shares if this does not alter the legal rights of existing shareholders but may dilute their value
Ratio Decidendi
Section 437F does not prevent the issue of new shares during administration where the legal rights of existing shareholders are not changed, even if the value of their shares is diminished; thus, the proposed allotment is not struck down by s 437F.
Court Disposition
Application dismissed
Orders
- The application be dismissed.
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