McInnes Wilson Lawyers acted for a former voluntary administrator in successfully applying to review a remuneration determination made during the voluntary administration period at a second meeting of creditors.
At the meeting, the company’s creditors resolved that the company execute a deed of company arrangement. Creditors also resolved that the voluntary administrator’s remuneration be determined as an “ad valorem” amount calculated at the rate of 20% of the value of the admitted proofs of creditors entitled to share in the fund provided for under the DOCA.
The application sought to set aside and substitute or to vary the creditors’ determination.
It was opposed by the company and two of its creditors on the grounds that all or most of the work of the administration was not necessary, as the voluntary administrator had been invalidly appointed and the administration should have been terminated early in the course of the administration.
His Honour Justice Jackson rejected the respondents’ submissions on the basis that the respondents were not entitled to “approbate and reprobate”. That is, it was not permissible to act consistently with the valid commencement and continuation of the voluntary administration by utilising its processes to enter into a DOCA which benefitted them but later resile from that position in order to avoid the administrator’s entitlement to remuneration.
His Honour also rejected the remuneration calculation method adopted by creditors, which did not logically represent a measure of reasonable remuneration for the work performed.
The decision is Stimpson v Allied Rural Pty Ltd (subject to deed of company arrangement) & Ors [2022] QSC 74 and can be accessed here.
The McInnes Wilson Lawyers team was led by Principals Austin Bull, Glenn Caligaris and Associate Clair King. For more information about the McInnes Wilson Lawyers Disputes and Insolvency team and their experience, please click here.
If you would like to see how we can assist you, please contact Glenn Caligaris directly on (07) 3231 0601 or gcaligaris@mcw.com.au, or Austin Bull on (07) 3231 0611 or abull@mcw.com.au.
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