Buzzle v Apple – Creditors Take Heart

A recent NSW Supreme Court decision¹ provides further guidance and some comfort on the law of shadow directorship.

Background

Buzzle Operations resulted from the merger of a number of resellers of Apple products. Under the terms of their contracts with Apple, the resellers required Apple's consent to be able to effect the merger, so Apple took part in discussions leading up to and after the merger. During these discussions, Apple made clear to Buzzle its financial expectations and what it required Buzzle to do in order to maintain its co-operation and give its consent. In particular, Apple:

• threatened to withhold its consent to the merger unless certain conditions were met (eg. the provision of a charge to secure Buzzle's debts to Apple);