Pirina, in the matter of Fund Options (Australia) Pty Ltd (in liquidation) [2020] FCA 1256

Pirina, in the matter of Fund Options (Australia) Pty Ltd (in liquidation) [2020] FCA 1256

The Court may make orders in favour of new liquidators, justifying specified investigation and communication steps regarding creditors per s 90-15(1); liquidators may be paid undrawn approved remuneration for preservation and realisation work, but the jurisdiction for judicial advice does not extend to ratifying acts already undertaken. No distribution of assets is to occur until the Court has considered whether all admitted creditors would be paid in full or whether the characterisation of claims requires examination.

Jurisdiction
Australia
Judgment Date
02 September 2020
Procedural Posture
Application for Judicial Advice and Remuneration Approval in Creditors' Voluntary Winding Up / Post Liquidator Substitution, Application for Directions and Orders on Remuneration
Outcome
Application granted in part; orders made for judicial advice and remuneration approval, refusal of order for ratification of past acts.
Legal Topics
['liquidators—judicial Advice' 'creditors’ Voluntary Winding Up' 'remuneration Approval' 'external Administration Directions' 'creditor Identification Procedure']
['bankruptcy and Insolvency' 'corporations Law'] ['liquidators—judicial Advice' 'creditors’ Voluntary Winding Up' 'remuneration Approval' 'external Administration Directions' 'creditor Identification Procedure']

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Procedural Posture

Application for Judicial Advice and Remuneration Approval in Creditors' Voluntary Winding Up / Post Liquidator Substitution, Application for Directions and Orders on Remuneration

Legal Issues

  1. 1 ['Whether new liquidators are entitled to rely on directions made in favour of previous liquidator under s 90-15 of the Insolvency Practice Schedule (Corporations)' 'Whether the Court should make orders granting new liquidators judicial advice in relation to asset distribution and creditor identification steps' 'Whether Court should approve undrawn remuneration of liquidators under s 60-10(1)' 'Whether the Court can or should ratify acts already undertaken by the new liquidators in reliance on prior directions']

Ratio Decidendi

The Court may make orders in favour of new liquidators, justifying specified investigation and communication steps regarding creditors per s 90-15(1); liquidators may be paid undrawn approved remuneration for preservation and realisation work, but the jurisdiction for judicial advice does not extend to ratifying acts already undertaken. No distribution of assets is to occur until the Court has considered whether all admitted creditors would be paid in full or whether the characterisation of claims requires examination.

Court Disposition

Application granted in part; orders made for judicial advice and remuneration approval, refusal of order for ratification of past acts.

Orders

  • ['Plaintiffs (liquidators) justified in taking specified steps to identify and invite potential creditors to submit proofs of debt, including seeking contact details from banks and writing to depositors.' 'Plaintiffs justified in adjudicating proofs of debt received under current and prior orders, and must refrain...