Nipps (Administrator) v Remagen Lend ADA Pty Ltd, in the matter of Adaman Resources Pty Ltd (Administrators Appointed) (No 4) [2021] FCA 644

Nipps (Administrator) v Remagen Lend ADA Pty Ltd, in the matter of Adaman Resources Pty Ltd (Administrators Appointed) (No 4) [2021] FCA 644

The Court granted the orders sought limiting the administrators' personal liability under the Funding Deed to the extent of indemnity out of company property, and found the administrators were justified in entering into and drawing down under the Funding Deed, as doing so was in the interests of creditors and consistent with the objectives of Part 5.3A of the Corporations Act.

Jurisdiction
Australia
Judgment Date
08 June 2021
Procedural Posture
Corporations Administration Application for Modification of Operation of S 443 a and Directions Under S 90 15 / Application for Orders on the Papers
Outcome
Application granted. Orders made as sought by the administrators.
Legal Topics
['administration' 'personal Liability of Administrators' 'court Modification of Statutory Operation' 'directions for Entering Funding Agreement']
['corporations'] ['administration' 'personal Liability of Administrators' 'court Modification of Statutory Operation' 'directions for Entering Funding Agreement']

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Procedural Posture

Corporations Administration Application for Modification of Operation of S 443 a and Directions Under S 90 15 / Application for Orders on the Papers

Legal Issues

  1. 1 ["Whether the operation of s 443A of the Corporations Act 2001 (Cth) should be modified to limit the administrators' personal liability under a funding agreement" 'Whether the administrators would be justified in entering into the proposed funding agreement and drawing down funds']

Ratio Decidendi

The Court granted the orders sought limiting the administrators' personal liability under the Funding Deed to the extent of indemnity out of company property, and found the administrators were justified in entering into and drawing down under the Funding Deed, as doing so was in the interests of creditors and consistent with the objectives of Part 5.3A of the Corporations Act.

Court Disposition

Application granted. Orders made as sought by the administrators.

Orders

  • ["Part 5.3A of the Corporations Act 2001 (Cth) is to operate as if certain limitations apply to administrators' personal liability under a specified Funding Deed." 'Administrators are justified, and would otherwise be acting reasonably, in entering into and drawing down under the Funding Deed.' 'Administrators to...