Courts won't avoid provisional appointments where a company is solvent

In a recent decision of the Federal Court of Australia (Krejci (liquidator) v Panella, in the matter of Richmond Lifts Pty Ltd (in liq) [2025] FCA 151), Justice Cheeseman upheld orders appointing provisional liquidators and receivers to several solvent companies. The case is an important reminder that the Court is willing to intervene in a solvent company's affairs where the circumstances are sufficiently serious.

Key takeaways

• While the appointment of external administrators is a drastic remedy, the court will not shy away from exercising its discretion to make appointments where the circumstances warrant intervention.
  
  
• While solvency of a company generally weighs against the appointment of external administrators, companies, liquidators and creditors should remember that solvency alone does not preclude the appointment of provisional external administrators.