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ARTICLE · 21 JULY 2006

Groundbreaking Case On Administrator’s Pay

Gadens Lawyers
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On 16 February 2006, the Federal Court of Australia handed down an eagerly anticipated judgment, which addressed controversial issues in relation to the fixing of remuneration of an administrator under a Deed of Company Arrangement (DOCA).

AustraliaInsolvency/Bankruptcy/Re-Structuring
Gidley, in the matter of Aliance Motor Body Pty Limited (Subject to Deed of Company Arrangement) (ACN 109 860 899) [2006] FCA 102

On 16 February 2006, the Federal Court of Australia handed down an eagerly anticipated judgment, which addressed controversial issues in relation to the fixing of remuneration of an administrator under a Deed of Company Arrangement (DOCA).

Facts

Administrators were appointed to Aliance Motor Body Pty Limited.

The second meeting of creditors voted in favour of a DOCA. In addition, resolutions were passed purporting to fix the remuneration of the administrators according to an hourly rate and subject to a limit of $30,000.

The deed administrator sought a direction that he was justified in acting as administrator of the DOCA on the basis that his remuneration was properly fixed by the resolution of the creditors of the company.

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