1Where creditor approval under s 477(2B) is defeated by the votes of related party creditors who are potential defendants to the very claims to be funded, the court may grant approval retrospectively, particularly where all unrelated creditors voted in favour and no creditor opposes the application.
2Retrospective approval under s 477(2B) is not precluded by delay where the liquidator provides a candid explanation (such as a change of solicitors and time needed to negotiate amendments and review voluminous material), there is no prejudice to creditors, and the agreement was conditional on approval being obtained.
3Section 477(2B) is directed at promoting the interests of the liquidation and creditors rather than disciplining tardy liquidators; creditors should not be deprived of potential benefits from agreements by reason of delay in seeking approval.
