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Michael Murray’s on-going commentary on issues in corporate and personal insolvency law and related policy and law reform, in Australia and internationally. Given the scope of insolvency, this extends to business, consumer and professional conduct, and ethics, governance and regulation, criminal, tax, environmental and administrative law, and the courts and government.

 

Condor Blanco – three useful propositions

This decision in Condor Blanco Mines Ltd [2016] NSWSC 1196 is important for three propositions:

  1. In general, it is not part of a voluntary administrator’s responsibility, in deciding to take an appointment or later assessing its the validity, to delve into any improper purpose or motive of the directors beyond that of using Part 5.3A as a response to their company’s actual or impending insolvency.2. An administrator cannot properly take proceedings to test the validity of their appointment under any of s 442A, s 447C or possibly s 447D because this would involve a situation where the administrator had a clear conflict of personal interest, the “personal pecuniary interest in retention of a remunerated office”.3. Where a company in administration is without funds, an administrator is not required to spend his or her own money in bringing discretionary court proceedings unless there is an express or implied positive duty to do so.  This is the case despite the absence of an equivalent of s 545 in Part 5.3A.

Any comment welcome.

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