McVeigh & Anor v Linen House Pty Ltd & Rugs Galore Australia Pty Ltd (Subject to deed of company arrangement)

(2000) 18 ACLC 311; [2000] VSCA 4

Victorian Court of Appeal

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Catchwords

1. Corporations
2. › Insolvency
3. › Deed of company arrangement
4. › Termination by court
5. › Stay of order for termination
6. › Whether stay effective to delay deemed voluntary liquidation under reg 5.3A.07
7. › Whether court has power to delay operation of termination order
8. › Corporations Law, ss 445D, 446B, reg 5.3A.07
1. Corporations
2. › Insolvency
3. › Deed of company arrangement
4. › Termination by court
5. › Failure of administrator to inform creditors of material information
6. › Whether jurisdiction under s 445D(1) enlivened
7. › Whether discretion to terminate properly exercised
8. › Corporations Law, ss 445D(1)(a), 445D(1)(c)
1. Corporations
2. › Insolvency
3. › Voluntary administration
4. › Appointment of administrator by company
5. › Whether second administrator may be appointed under s 436A while first deed of company arrangement still in existence
6. › Whether board resolution satisfied requirements of s 436A(1)
7. › Whether opinion of insolvency bona fide
8. › Corporations Law, ss 436A, 447C
1. Corporations
2. › Insolvency
3. › Voluntary administration
4. › Duties of administrator
5. › Obligation to provide material information to creditors
6. › Time constraints under Part 5.3A
7. › Corporations Law, ss 438A, 439A

Quick Take

A court may effectively stay an order terminating a deed of company arrangement under s 445D, thereby delaying the deemed voluntary liquidation under reg 5.3A.07. The order is properly characterised as an order 'for' termination rather than 'of' termination, and its operation may be delayed from the outset. A second administrator may be appointed under s 436A while a first deed remains in existence subject to a stayed termination order, though courts will not readily permit repeated attempts at deeds of company arrangement where the first failed due to deficient information.