Not so perfect solution - Court relief sought to avoid automatic vesting of security interest

This week's TGIF considers a recent Federal Court decision in which relief was sought under section 588FM of the Corporations Act to ensure a security interest perfected after the 'critical time' did not automatically vest.

WHAT HAPPENED?

On 7 April 2016, administrators were appointed to OneSteel. OneSteel, a member of the Arrium Group of Companies, subsequently entered into a deed of company arrangement.

Prior to entering administration, OneSteel used plant and equipment hired from K.J Renfrey Nominees Pty Ltd atf The Renfrey Family Trust (hereinafter referred to as 'Renfrey'). After OneSteel was placed into administration, Renfrey discovered that it had incorrectly registered its security interest under a hire services agreement against OneSteel's parent company, Arrium Limited.