FENNING v LEXUS TRUSTEES LTD & OR [2019] NZHC 3009

FENNING v LEXUS TRUSTEES LTD & OR [2019] NZHC 3009

The court approved the s333 proposal because the majority of creditors by number and value supported it, the proposal delivered a greater return (10 cents in the dollar) than likely in bankruptcy, institutional creditors had made a commercially informed decision, and there was evidence (commission documentation)...

Source-derived case information.

Citation
[2019] NZHC 3009
Parties
Insolvent / Judgment Debtor: Warren Fenning; Judgment Creditor / First Creditor: Lexus Trustees Limited; Trustee of the 24 Trust / Judgment Creditor: Sally Anne Judith Ridge; Second Creditor: Heartland Bank Limited; Third Creditor: Westpac Banking Corporation; Trustee of the Creditors: Trustee (unnamed)
Court
High Court
Jurisdiction
New Zealand
Judgment Date
19 November 2019
Procedural Posture
Insolvency — Approval of Proposal Under S 333 Insolvency Act 2006 / Application for Court Approval of Proposal Following Creditors' Meeting
Outcome
Proposal approved pursuant to s 333 Insolvency Act 2006 subject to condition of immediate payment to judgment creditors
Legal Topics
S333 Proposal Approval, Reasonableness of Proposal, Creditor Voting, Public Interest in Insolvency
Insolvency Law Bankruptcy Commercial Law S333 Proposal Approval Reasonableness of Proposal Creditor Voting Public Interest in Insolvency

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Parties

Warren Fenning

Insolvent / Judgment Debtor

Lexus Trustees Limited

Judgment Creditor / First Creditor

Sally Anne Judith Ridge

Trustee of the 24 Trust / Judgment Creditor

Heartland Bank Limited

Second Creditor

Westpac Banking Corporation

Third Creditor

Trustee (unnamed)

Trustee of the Creditors

Procedural Posture

Insolvency — Approval of Proposal Under S 333 Insolvency Act 2006 / Application for Court Approval of Proposal Following Creditors' Meeting

Legal Issues

  1. 1 Whether the court should approve a proposal under s333 despite objection by judgment creditors
  2. 2 Whether the terms of the proposal are reasonable and calculated to benefit the general body of creditors
  3. 3 Whether public interest or the risk of future reckless borrowing makes approval inexpedient

Ratio Decidendi

The court approved the s333 proposal because the majority of creditors by number and value supported it, the proposal delivered a greater return (10 cents in the dollar) than likely in bankruptcy, institutional creditors had made a commercially informed decision, and there was evidence (commission documentation) supporting the insolvent's ability to meet payments; approval was granted subject to the condition that the insolvent pay $5,756 to the judgment creditors within 7 days.

Court Disposition

Proposal approved pursuant to s 333 Insolvency Act 2006 subject to condition of immediate payment to judgment creditors

Orders

  • Order approving trustee's proposal under s 333 Insolvency Act 2006 subject to the condition that Warren Fenning make a payment of $5,756 to the judgment creditors within 7 days