Pinnacle Constructions Pty Limited (In Liquidation); Re John Edward Star [2002] NSWSC 242

Pinnacle Constructions Pty Limited (In Liquidation); Re John Edward Star [2002] NSWSC 242

In circumstances where all creditors were invited to contribute, only a minority did so, company had no funds, risk was significant, amount distributable is small, administrative costs would outweigh benefit, the entirety of the sum recovered should be distributed amongst creditors who contributed to the fighting fund in proportion to their contributions.

Parties
Plaintiff: Pinnacle Constructions Pty Limited (In Liquidation); Liquidator: John Edward Star
Jurisdiction
Australia
Judgment Date
10 December 2001
Procedural Posture
Application by Liquidator Under S564 of the Corporations Law / Judgment
Outcome
Application granted; net amount recovered to be distributed amongst funding creditors in specified proportions.
Legal Topics
Winding Up, Section 564 Corporations Law, Distribution to Funding Creditors, Liquidator's Power
Corporations Winding Up Section 564 Corporations Law Distribution to Funding Creditors Liquidator's Power

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Parties

Pinnacle Constructions Pty Limited (In Liquidation)

Plaintiff

John Edward Star

Liquidator

Procedural Posture

Application by Liquidator Under S564 of the Corporations Law / Judgment

Legal Issues

  1. 1 Whether it is appropriate for the entire amount recovered to be distributed solely to creditors who funded the litigation to protect or preserve company property under s564 of the Corporations Law

Ratio Decidendi

In circumstances where all creditors were invited to contribute, only a minority did so, company had no funds, risk was significant, amount distributable is small, administrative costs would outweigh benefit, the entirety of the sum recovered should be distributed amongst creditors who contributed to the fighting fund in proportion to their contributions.

Court Disposition

Application granted; net amount recovered to be distributed amongst funding creditors in specified proportions.

Orders

  • Net amount recovered to be paid to five contributing creditors in proportions: Austral Brick Co Pty Limited 11.82%; Complete Roofing Pty Limited 34.65%; Waffle Pod People Pty Limited 34.65%; Waikiwi Fencing Pty Limited 9.44%; Warrent Watson Electrical Pty Limited 9.44%.
  • Costs of the application to be paid from company assets.