Liquidators get the green light for litigation funding agreements

In this week's TGIF, we consider Jahani, in the matter of Ralan Property Services Pty Ltd (receivers and managers appointed) (in liq) [2023] FCA 738, a Federal Court decision approving the liquidators' entry into funding agreements.

Key takeaways

• Litigation arrangements which slow down the liquidation process may nonetheless be in the best interest of creditors.
• When a court is called to approve entry into litigation funding agreements, the court will give due weight to the liquidator's commercial judgment and experience, whether a meritorious claim would otherwise be abandoned, the value of the return to creditors and whether the proposed funding arrangements are the best available.