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ARTICLE · 19 DECEMBER 2018

Directions engineered: Conduct justified – Substantive rights not affected

Corrs Chambers Westgarth
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The liquidator was justified in making distributions to creditors despite claims by employees for leave entitlements.

AustraliaInsolvency/Bankruptcy/Re-Structuring
Cameron Cheetham
Cameron Cheetham
Jade Rowarth
Jade Rowarth
Kirsty Sutherland
Kirsty Sutherland
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This week's TGIF considers Re Broens Pty Limited (in liq) [2018] NSWSC 1747, in which a liquidator was held to be justified in making distributions to creditors in spite of several claims by employees for long service leave entitlements.

WHAT HAPPENED?

On 19 December 2016, voluntary administrators were appointed to Broens Pty Limited (the Company). The Company supplied machinery & services to manufacturers in aerospace, rail, defence and mining industries.

In the month following their appointment, the administrators caused the Company to enter into an asset sale agreement with Broens SA Pty Ltd (Broens SA). That agreement included a clause which required the Company to terminate the employment of all employees on completion and assist Broens SA in making new offers to those former employees.

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