Creditors can even access PE documents

Various lenders and creditors of Arrium have recently won the right to access the public examination (“PE”) documents of the directors, key management personnel and advisers of Arrium.

When Arrium collapsed into Voluntary Administration in April 2016, it owed more than $4 billion to various classes of creditors and employees.

As you can imagine, this has left many feeling hard done by.

Recently, the Deed Administrators have begun conducting what are called ‘public examinations’ to attempt to identify what happened to Arrium, and any possible voidable, fraudulent or other scrupulous transactions.

In allowing the creditors access to the PE documents, the Court had regard to (per sections 596F(1)(e), 597(4), 597(13)-(14A) Corporations Act):

– there is a reasonable prospect of benefit to all creditors, in that new and exclusive claims could be identified; (Re New Cap case)

– each of the lenders and creditors were members of the committee of inspection;

– there is no suggestion of an abuse of process. This is because the documents were only allowed to be used in furthering the cause of the PE; and

– public policy basis (Re New Cap case).

This is a win for creditors and should incentivise you to get more involved with Liquidator investigations and PE’s.

Link to the case http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nsw/NSWSC//2018/747.html

#SVVoidables

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