RE MINGDA HOLDING

Parties

Procedural Posture

Companies Winding Up / Hearing on Applications SUM 125 and OA 26; Judgment

Legal Issues

1. 1 Whether court can grant retrospective authorisation for a liquidator to appoint solicitors under s144(1)(f) IRDA
2. 2 Whether Liquidator may assign proceeds and enter into Funding Agreement under ss144(1)(g) and 144(2)(b) IRDA and IRD (CWU) Regulations regs 37 and 39
3. 3 Whether creditor funder AMT should be granted an advantage under s204(3) IRDA and on what terms

Ratio Decidendi

The court held that s144(1)(f) must be read to require prior authorisation and therefore the court has no power to backdate authorisation for a liquidator’s appointment of solicitors; accordingly it granted only prospective authorisation to appoint FLC and required the Liquidator to bear costs incurred from the unauthorised appointment due to unjustified delay and prior COI rejection; the Funding Agreement was authorised because assignments fall within ss144(1)(g) (unfair preference proceeds) and 144(2)(b) (void disposition restitution/causes of action), regs37/39 were satisfied and AMT’s prospective advantage under s204(3) was fair and reasonable (AMT awarded priority up to 100% of its...

Court Disposition

SUM 125 allowed in part and OA 26 allowed; prospective authorisation granted for appointment of FLC and to enter Funding Agreement; AMT granted advantage under s204(3); Liquidator ordered to bear costs of FLC incurred prior to the order; costs directions reserved

Orders

• Authorisation granted to appoint Fullerton Law Chambers LLC as solicitors for Mingda effective from date of order; no retrospective effect
• Authorisation granted for Mingda (via Liquidator) to enter into the Funding Agreement with Amalgamated Metal Trading Limited on proposed terms