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ARTICLE · 25 AUGUST 2015

Lessons for administrators: Avoid material omissions in a section 439A report and get the DOCA right

Clayton Utz
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A section 439A report must contain all material information which is known or reasonably ascertainable by administrators.

AustraliaInsolvency/Bankruptcy/Re-Structuring
Laura Hawes (Formerly With Clayton Utz)
Laura Hawes (Formerly With Clayton Utz)
Scott Sharry (Formerly With Clayton Utz)
Scott Sharry (Formerly With Clayton Utz)
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Key Points:

A section 439A report must contain all material information which is known or reasonably ascertainable by administrators.

A recent decision, In the matter of Recycling Holdings Pty Limited [2015] NSWSC 1016, provides some guidance for administrators on what constitutes a material omission or misstatement in a section 439A report and second meeting of creditors, and what administrators can discuss, pre-appointment, with a director concerning potential terms of a DOCA before an apprehension of bias may arise.

The administrators are called to Recycling Holdings Pty Limited

Recycling Holdings Pty Ltd was in liquidation. At the director's suggestion, the liquidator appointed voluntary administrators to the company pursuant to section 436B of the Corporations Act 2001 (Cth).

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