Introduction
On a company proceeding into administration under Part 5.3A
Corporations Act, it often becomes apparent to the appointed
administrator that external funding will need to be obtained for
the purpose of meeting the company's ongoing operating
costs.
Obtaining funds in these circumstances may provide the
administrator with the opportunity to sell the company's
business as a going concern, or alternatively to fully explore
recovery and reconstruction options for the company.
By way of recent example, the administrators appointed to a WA
uranium miner, Paladin Energy Ltd, sought to secure a $US60
million, 12-month financing facility to keep the company operating
on a business-as-usual basis while they implemented
recapitalization and restructuring strategies with a view to
maximizing value for all stakeholders. The rescue effort proposed
by the administrators necessitated a directions application to the
Federal Court: see Woods, in the matter of Paladin
