Fowler v Lindholm

In the case of Fowler v Lindholm, the appellant, Mr Robert Fowler, challenged the orders made by the Court on 4 August 2009, approving the schemes of arrangement between the Opes Prime Group companies and their creditors. The Opes Prime Group, comprising Opes Stockbroking, Leveraged Capital, Opes Group, and Hawkswood Investments, was involved in stockbroking services and securities lending, with ANZ and Merrill Lynch as financiers. The companies faced financial difficulties, leading to appointments of administrators and liquidators. A mediation resulted in an agreement to settle Opes-related claims for $226 million and the release of assets valued at $27 million to the liquidators for distribution to creditors.

The legal issues before the Court were whether it had the power to approve the schemes, considering the provisions requiring creditors to release claims against Merrill Lynch and ANZ and indemnify them against potential claims by others. Additionally, Mr Fowler argued that the Court's discretion to approve the schemes miscarried due to provisions that prioritized legal costs and payments to litigation funders over distributions to other creditors. The Court had to determine if these provisions were valid and if the Court's exercise of discretion was appropriate.

The Court found that it had the power to approve the schemes, as the provisions requiring creditors to release claims against Merrill Lynch and ANZ and indemnify them were valid. The Court held that the schemes were for the benefit of creditors and did not unfairly prejudice any of them, including Mr Fowler. The Court also determined that the exercise of its discretion to approve the schemes was not flawed, as the provisions regarding payments to litigation funders were not disproportionate and were necessary to achieve the settlement. Therefore, the appeal was dismissed, and the costs of the appeal were awarded to the respondents.