Three liquidators for three intertwined companies

A Judge appointed individual liquidators to three separate companies – OT, AGM and Ozifin – rather than a common liquidator for all of them, even though their affairs were complex and intertwined.

This necessitated their joint application to the court for permission to share company and individual information between themselves, including ‘personal information’, in order to address privacy law restrictions. The Privacy Act allows such an order authorising the use or disclosure of ‘personal information’.

The companies operated a business dealing in financial products, being leveraged derivatives in the form of contracts for difference (CFDs), margin foreign exchange contracts (margin FX contracts) and binary options.

As Justice Beach explained, information held in relation to each may be relevant to the liquidation of each of the other companies in various respects: see ASIC v AGM Markets Pty Ltd (in liq) (No 3) [2020] FCA 208.

Nevertheless, the Judge gave several good reasons why he had rejected the appointment of common liquidators for all.

  1. No costs savings

He was not satisfied of the potential for significant cost savings and efficiencies from a single appointment to each of the 3 entities. They are not related entities, and do not otherwise form part of a company group; they have separate beneficial owners, and different officers; there is very little commonality between their client bases; they each operated separate customer relationship platforms; and the major creditors of each entity did not have any relationship with the other entities.

2. Separate investigations

In the winding up of each of Ozifin, OT and AGM, separate investigations will be necessary:

    • to identify and communicate with 3 different client bases, including to access 3 different CRM platforms;
    • in order to report to 3 different sets of creditors, including to adjudicate on 3 different groups of creditor claims; and
    • to analyse the individual affairs of each of Ozifin, OT and AGM.

3. Conflicts

There would have been real issues concerning conflicts of duty if a single external administrator had been appointed to all, arising out of the claims that may be made between and against the 3 entities. There are various categories of such claims. And where each of the 3 entities has 3 different creditor bases, those creditors will have divergent interests. It would be unfair on all the creditors if common liquidators were to have been appointed.

It is possible to manage conflicts as and when they arise even if there is a single liquidator, for example by way of a special purpose liquidator who could make a claim or adjudicate upon one as and when the need arose. But this would create an additional layer of cost and would be counter-productive.

Further, it is inappropriate for a liquidator of one company to lodge a proof of debt in another liquidation and then to decide whether to accept that proof of debt in his capacity as the liquidator of the other company.

It is possible for a court to authorize conduct that would otherwise involve a conflict of duty on an application which explicitly sought dispensation from fiduciary duties, with appropriate evidence showing how and why circumstances existed to warrant such dispensation. But the task of explanation inherent in such a request is ‘an exacting one’.

Alternatively, the Judge could have given a direction to a liquidator who faced any conflict of duty.


But in the present matter, none of those scenarios would have been more advantageous than appointing three separate liquidators.

See Gollant, in the matter of OT Markets Pty Ltd (in liq) [2020] FCA 207.

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