Liquidators succeed in claim against ‘restructuring' adviser

This week's TGIF considers a recent Federal Court of Australia decision (Connelly (liquidator) v Papadopoulos, in the matter of TSK QLD Pty Ltd (in liq) [2024] FCA 888). In the case, it was determined that a restructuring adviser who engineered an asset-stripping scheme may be found liable for the full value of the loss arising out of the scheme.

Key Takeaways

• This judgment highlights that an adviser who designs an asset-stripping scheme may be found liable for the full value of the loss arising out of the scheme – not just amounts retained by them, nor transactions they are directly involved with.
  
  
• The degree of knowledge of specific transactions was not to the point, given the adviser's knowledge of all the essential facts of the scheme's design and that it involved a breach of fiduciary duty by the company's director. The adviser's knowledge of and involvement with (or lack thereof) precise transactions within the scheme was irrelevant.