Court rejects bid to appoint special purpose liquidator

This week's TGIF considers In the matter of Jabiru Satellite Limited (in liq) and NewSat Limited (in liq)  [2022] NSWSC 459 where the Court declined to appoint a special purpose liquidator to pursue claims available to the company.

Key Takeaways

• On any application to appoint a special purpose liquidator, it will be critical to the exercise of the court's discretion to demonstrate that the appointment will be just and beneficial to creditors.
  
  
• If the appointment is to pursue potential recovery actions, the terms of any funding arrangement will be closely analysed, including the proposed fee to any identified funder.
  
  
• If a funding fee exceeds usual market rates, evidence will be required to justify that fee so as to ensure that the appointment and proposed claim can be regarded as beneficial to the winding up.