ARTICLE · 23 AUGUST 2013

Unsecured creditor gets better financial return by taking active role in liquidation process

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When liquidators are appointed, unsecured creditors are not often interested in the process and assume all is lost.

AustraliaInsolvency/Bankruptcy/Re-Structuring

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When liquidators are appointed to a company, unsecured creditors often don't take much of an interest in the liquidation process, immediately assuming all is lost.

The recent Federal Court of Australia decision of Robinson, in the Matter of ACN 069 895 585 Pty Ltd (formerly known as Waterman Collections Pty Ltd) (in liq) [2013] FCA 706 is an example of a case where an unsecured creditor was able to secure a better financial return by taking an active role in the liquidation process, assisting the liquidator with a number of claims.

Facts

The case involved the liquidation of Waterman Collections Pty Ltd (Waterman).
In the liquidation an unsecured creditor, Insurance Australia Limited (IAL), was owed approximately $600,000.

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