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ARTICLE · 31 AUGUST 2022

Administrators Protected From Personal Liability And Permitted To Trade On

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Proposal by the administrator to continue trading in order to maximise the chances of a sale as a going concern was approved.

AustraliaInsolvency/Bankruptcy/Re-Structuring
Cameron Cheetham
Cameron Cheetham
Mark Wilks
Mark Wilks
Craig Ensor
Craig Ensor
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This week's TGIF considers Hill, in the matter of Ovato Limited (Administrators Appointed) [2022] FCA 903 in which the Federal Court approved the administrators' proposal for the Ovato Group to continue trading in order to maximise the chances of a sale as a going concern. The proposal was dependent on ongoing funding from the Ovato Group's financier and, in that context, the administrators were able to agree to have their personal liability limited to the assets subject to the financier's security.

Key takeaways

  • Administrators should investigate third-party funding in an administration when the funding arrangements are properly characterised as being for the benefit of creditors.

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