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ARTICLE · 01 SEPTEMBER 2019

Constructing Viable Claims: When Will A Special Purpose Liquidator Be Necessary?

Corrs Chambers Westgarth
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This week's TGIF considers when a special purpose liquidator might be appointed to investigate 'not viable' claims.

AustraliaInsolvency/Bankruptcy/Re-Structuring
Cameron Cheetham
Cameron Cheetham
Craig Ensor
Craig Ensor
Felicity Healy
Felicity Healy
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This week's TGIF considers the circumstances in which a special purpose liquidator will be appointed to investigate claims the liquidator has already determined are 'not viable' in the decision in Williams & Kersten Pty Ltd v Walton Constructions (Qld) Pty Ltd (in liq), in the matter of Walton Constructions (Qld) Pty Ltd (in liq) [2019] FCA 1201.

Background

Walton Construction (Qld) Pty Ltd (in liq) and Walton Construction Pty Ltd (in liq) were part of a corporate group controlled by director Craig Walton. The group provided construction services.

The group's bank provided performance guarantees on behalf of companies within the group in favour of principals under various building contracts. The bank had security to support those bank guarantees, but in April 2013 at least some of the entities in the group were insolvent and the value of the security did not cover the bank's exposure.

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