› Leave under s 459S of the Corporations Act 2001 (Cth)
› Materiality to proving solvency
› Narrow approach
Corporations
› Winding up
› Winding up in insolvency
› Proof of solvency
› Unaudited accounts
› Reliance on external funding
Corporations
› Winding up
› Winding up in insolvency
› Discretion to decline winding-up order
› Related proceeding
› Stay of winding-up application
Quick Take
1Under the narrow approach to s 459S(2) mandated by Switz Pty Ltd v Glowbind Pty Ltd, where a company contends it is solvent regardless of the disputed debt, the court cannot be satisfied that a ground based on a dispute about that debt is material to proving solvency, and leave must be refused.
2Unaudited special purpose financial statements with assurance disclaimers, vague assertions of external financial support lacking detail as to terms, capacity and limits, and internal allegations that the company's own accounting records are unreliable, are insufficient to displace the presumption of insolvency.
3The discretion under s 467 to decline to wind up an insolvent company on account of a related proceeding will not ordinarily be exercised where the related proceeding is at a very early stage, its resolution is distant, and granting a stay would subvert the policy of s 459S by permitting reliance on substantially the same grounds already rejected in the statutory demand context.
