By Leah Chick and Olga Matouk
Key Point
- Trustees for debenture holders are encouraged to seek court assistance.
The recent case of ASIC v Bridgecorp Finance Limited [2006] NSWSC 836 was the first time that an application has been made to the Court under section 283HB of the Corporations Act. Section 283HB is located in Chapter 2L of the Corporations Act which governs an offer of debentures to investors that require disclosure under Chapter 6D of the Corporations Act ("Debenture Holders").
Under Chapter 2L, a debenture issuing entity ("Borrower") must enter into a trust deed and appoint a trustee that complies with section 283AC of the Corporations Act. Chapter 2L, together with the trust deed, imposes certain duties and obligations on a trustee to act for the benefit of the Debenture Holders. A trustee has the assistance of section 283HB available to it in performing its fiduciary role. Section 283HB(1) provides that the trustee (or ASIC) may bring an application to the
