A liquidator may enter into a litigation funding arrangement under which a third party funds litigation in exchange for a share of proceeds, and such an arrangement may be authorised as a disposition of property under s 477(2)(c) of the Corporations Law. The proceeds of statutory causes of action available to a liquidator (including under ss 565, 588FF and 588M) constitute 'property' of the company for the purposes of s 477(2)(c). While the public policy against trafficking in litigation survives the abolition of the torts of maintenance and champerty in Queensland, the countervailing policy of the Corporations Law in facilitating recovery of assets for creditors supports the validity of such arrangements when entered into in good faith and in the interests of creditors.
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