Court refuses mandatory examination of liquidator

This week's TGIF considers the decision of Kimberley Diamonds Ltd, in the matter of Kimberley Diamond Company Pty Ltd (in liq) [2016] FCA 1016 in which the Court refused to allow the mandatory examination of a liquidator under s 596A.

BACKGROUND

In July 2015, administrators were appointed to a company which operated a diamond mine. A marketing campaign in respect of the mining operations of the company commenced shortly after the administrators' appointment.

In their report to creditors, the administrators stated that it was their view that a sale of the business was in the best interests of creditors. They explained that diamond prices had dropped due to a major bankruptcy in the diamond industry which had caused market disruption. Further, the Western Australian government had recently introduced a levy which required the Company to pay a significant amount in respect of the levy.