CORPORATIONS — application to wind up on just and equitable ground — where Plaintiffs own 40% of shares in Defendant — where Defendant is special purpose vehicle incorporated for purpose of pursuing a specific residential property development — where Plaintiffs advanced $5m to Defendant to partly fund the development project — where Defendant’s controllers entered into Services Agreement with related entity — where development project has not yet obtained necessary planning approval — whether development project is commercially viable — whether there is a realistic probability of Defendant obtaining construction finance to complete development project — whether Defendant is insolvent — whether it is just and equitable that the Defendant be wound up — whether there is an alternative remedy available
Quick Take
1Where a special purpose vehicle has no realistic prospect of obtaining finance to complete its sole development project, and the project is commercially unviable on the available expert evidence, there is good reason to believe the company is cash flow and balance sheet insolvent, giving rise to a lack of confidence in the conduct of its affairs and a risk to the public interest warranting a winding-up order on the just and equitable ground.
2A company's inability to achieve the purpose for which it was formed — even where it continues to pursue that purpose — may justify winding up on the just and equitable ground without constituting a failure of substratum in the traditional sense, particularly where continued pursuit of the purpose will erode remaining equity and prejudice creditors.
3Under s 467(4), where the company opposing winding up asserts that alternative remedies such as a buy-out are available but has not responded to an open buy-out offer from the applicants and has not itself made any offer, the court will not be satisfied that an alternative remedy is available.
