A liquidator is not obliged to litigate where there are no funds
available to meet expenses under s545(1) of the Corporations
Act 2001 (Cth). Yet there are many occasions where the
liquidator will want to increase the pool of assets available for
general distribution among unsecured creditors from successful
litigation against directors for breaches of duties,1 or
a range of voidable transactions.2 However, the lack of
funds in an insolvent company could potentially restrict the
ability of the insolvency practitioner to take such actions. The
liquidator could seek funding from creditors3 and more
recently, the commercial litigation funding has played a
role.4
Since Re Movitor Pty Ltd5 in 1996 commercial
litigation funding has been available in the insolvency context as
a result of the court's interpretation of the liquidator's
statutory power of sale or disposition of company property under s
477(2)(c) of the Corporations Act 2001 (Cth). The
involvement of a
