Application for declaration that resolutions purportedly passed are invalid and of no force and/or effect
Quick Take
1Section 435A(a) of the Corporations Act 2001 (Cth) does not mandate that administrators recommend a deed of company arrangement over liquidation merely because the DOCA would preserve the company's existence, where the whole of the company's business would continue in existence under either option.
2Administrators' reports and recommendations to creditors are to be considered as commercial documents written to inform creditors in the context of Pt 5.3A, not parsed for strict relevance of each individual consideration; the question is whether the recommendation as a whole is one that no reasonable administrator could make.
3Considerations relating to the public interest in independent investigation of potential claims against directors, the risk of future shareholder disputes affecting company viability, and the prospect of legal challenge to a proposed DOCA are not irrelevant matters that a reasonable administrator is precluded from taking into account in recommending liquidation over a DOCA.
