We have recently been involved in two voluntary administrations
which lead to Deeds of Company Arrangement (DOCA) where a creditor
sought a copy of the company's insurance policy which they knew
was in existence and which was relevant to their claim. The
creditor knew of the policy's existence due to the terms of
their contract with the company, which required the company to
maintain such a policy. The creditors in each case were keen to
learn of the amount of the indemnity which might be available to
the company under that policy, now that the company was
insolvent.
In each administration, the approved DOCA quite properly
retained the creditor's rights which would have existed in
liquidation under section 562 of the Corporations Act 2001. Section
562 requires any recovery by a liquidator from an insurer in
respect of a creditor's claim, to be remitted to the creditor
after deduction of the expenses incurred by the liquidator in
getting in that insurance indemnity.
