SHEPPARD V BLANCHETT AND McCLOY AS LIQUIDATORS OF A.P.G. HOLDINGS LIMITED (IN LIQUIDATION) HC AK CIV-2011-404-7505

SHEPPARD V BLANCHETT AND McCLOY AS LIQUIDATORS OF A.P.G. HOLDINGS LIMITED (IN LIQUIDATION) HC AK CIV-2011-404-7505

The court refused to approve the proposal because it was not reasonable to exclude the liquidators (a bona fide disputed prospective creditor) from participation and because it was inexpedient to approve a proposal that would reward the insolvent's deliberate structuring of affairs to minimise accountability, undermining the public interest; accordingly s 333 approval was refused.

Citation
openlaw-03f78791_9fa5_40fd_9764_848bd3ccaf35.pdf
Parties
Applicant (trustee): Bruce Sheppard; Respondents (liquidators): David Murray Blanchett and Colin McCloy as Liquidators of A.P.G. Holdings Limited (In Liquidation); Insolvent / Proposer: David Andrew Tauber
Court
High Court
Jurisdiction
New Zealand
Judgment Date
23 April 2012
Procedural Posture
Application for Court Approval of a Proposal Under Part 5 of the Insolvency Act 2006 / Hearing Under S 333 Following Creditor Vote Under S 331; Interlocutory Disposition Refusing Approval
Outcome
Application to approve the proposal refused; proposal not approved
Legal Topics
Proposal Approval, Disclosure (s327), Reasonableness (s333(3)(b)), Expedience/public Interest (s333(3)(c)), Prospective Creditor Valuation, Directors' Duties and Liquidators' Claims, Treatment of Secured Vs Unsecured Creditors, Guarantees
Insolvency Law Bankruptcy Companies Law Civil Procedure Proposal Approval Disclosure (s327) Reasonableness (s333(3)(b)) Expedience/public Interest (s333(3)(c)) +4 more

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Parties

Bruce Sheppard

Applicant (trustee)

David Murray Blanchett and Colin McCloy as Liquidators of A.P.G. Holdings Limited (In Liquidation)

Respondents (liquidators)

David Andrew Tauber

Insolvent / Proposer

Procedural Posture

Application for Court Approval of a Proposal Under Part 5 of the Insolvency Act 2006 / Hearing Under S 333 Following Creditor Vote Under S 331; Interlocutory Disposition Refusing Approval

Legal Issues

  1. 1 Whether the proposal complied with statutory disclosure requirements (s327)
  2. 2 Whether the proposal is reasonable as between debtor and creditors and among creditors (s333(3)(b))
  3. 3 Whether it is expedient to approve the proposal having regard to public interest and conduct of the insolvent (s333(3)(c))

Ratio Decidendi

The court refused to approve the proposal because it was not reasonable to exclude the liquidators (a bona fide disputed prospective creditor) from participation and because it was inexpedient to approve a proposal that would reward the insolvent's deliberate structuring of affairs to minimise accountability, undermining the public interest; accordingly s 333 approval was refused.

Court Disposition

Application to approve the proposal refused; proposal not approved

Orders

  • Proposal refused and approval dismissed under s 333 of the Insolvency Act 2006
  • No costs awarded against the trustee