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ARTICLE · 21 JULY 2021

All clear: Funder free to use documents produced in examination

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In recent case the Federal Court provided guidance on the use of documents obtained under examination and production orders.

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 the decision of LCM Operations Pty Ltd, in the matter of 316 Group Pty Ltd (In Liquidation) [2021] FCA 324, in which the Federal Court provided guidance on the use of documents obtained under examination and production orders. 

Key Takeaways

  • Liquidators are not exempt from the Harman undertaking and must not use documents produced in response to an examination summons for a collateral or ulterior purpose.

  • The use of such documents in the liquidation (including in subsequent proceedings) is not a collateral or ulterior purpose.

  • Parity of reasoning suggests the same principles apply to an 'eligible applicant' (such as a litigation funder) if their own purpose could confer a benefit to the company or its creditors. 

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