Forrest Nursery Pty Ltd, in the matter of Euco Limited (ACN 102 448 055) (In Liq) v Lopez and Verge as joint and several liquidators of Euco Ltd (In Liquidation) (ACN 102 448 055)

In the case of Euco Limited (ACN 102 448 055) (In Liq) v Lopez and Verge as joint and several liquidators of Euco Ltd (In Liquidation) (ACN 102 448 055), the Court was asked to consider the variation of a Deed of Company Arrangement (DOCA) proposed by Forrest Nursery and Barry Richardson. Euco, a company involved in the development of methods for planting and harvesting Mallee trees and extracting eucalyptus oil, had been in liquidation. The major creditors, Forrest Nursery and Timbertech, proposed a variation to the DOCA, which had been executed on 21 February 2005. The liquidators supported the variation, and all notified creditors had no objections. The Court was required to determine whether it had the power to make the proposed variation and whether there were any grounds of public interest or commercial morality that would prevent the variation.

The Court found that there was no reason to prevent the variation. It held that the variation offered potential benefits to creditors and that the proposed orders did not infringe on public interest or commercial morality. The Court concluded that it had the power to make the variation orders and that there were no unforeseen effects on third-party interests that would prevent the orders from being made. The Court allowed the variation of the DOCA in accordance with the proposal submitted to the creditors' meeting held on 24 March 2006. The Court also ordered that the winding up of Euco be terminated and that the termination of the DOCA be set aside, subject to any variation pursuant to liberty to apply.

The Court's final orders were to terminate the winding up of Euco, set aside the termination of the DOCA, and direct that the DOCA be varied according to the proposal submitted to the creditors' meeting. The Deed Administrators were required to notify all creditors of these orders, and liberty to apply was granted to any person affected by the orders within 28 days. Additionally, liberty to apply was provided in relation to the appointment of the Deed Administrators if the liquidators were unwilling to act.