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ARTICLE · 21 OCTOBER 2024

When might a court appoint a provisional liquidator?

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Provisional liquidators may be appointed to preserve the status quo of a company.

AustraliaInsolvency/Bankruptcy/Re-Structuring
Michelle Dean
Michelle Dean
Eimear McNamara
Eimear McNamara
Marissa Forbes
Marissa Forbes
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The Federal Court in  Hema Maps Pty Ltd v HemaX Digital Pty Ltd, in the matter of HemaX Digital Pty Ltd [2024] FCA 1127, appointed a provisional liquidator to preserve the status quo until the determination of a winding up application. This winding up application was due to a deadlock and an irreparable breakdown in relations between shareholders, and mismanagement of the company.

Key Takeaways

  • Provisional liquidators may be appointed to preserve the status quo of a company where there is a deadlock or irreparable breakdown in relations between shareholders and mismanagement.

  • A court must be satisfied that there is a valid winding up application, and urgency and sufficient reason for intervention prior to the final hearing of the winding up application.

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