In the matter of DSHE Holdings Limited

In the Federal Court, DSHE Holdings Limited sought orders to facilitate its deregistration without any intervening winding up. The company had entered into a deed of company arrangement with its creditors, and was now seeking to conclude the arrangement without a winding up. The legal issues before the court were whether the court had the power under section 90-15 of the Insolvency Practice Schedule (Cth) to make the orders sought and, if so, whether the orders should be granted. The court was also asked to terminate the deed of company arrangement and modify the operation of the winding up regime in relation to reporting to creditors under section 447A of the Corporations Act 2001 (Cth).

The court held that it did have the power to make the orders sought under section 90-15 of the Insolvency Practice Schedule. However, the court considered that the orders were not appropriate in the circumstances of this case. The court noted that the deed of company arrangement had not been approved by the requisite majority of creditors, and that the remuneration claimed by the deed administrator exceeded the total creditors’ claims. The court was of the view that these factors outweighed any potential benefits of making the orders sought. The court also noted that there was no evidence before it that the making of the orders would not prejudice the interests of creditors.

The court refused to make the orders sought and terminated the deed of company arrangement. The court made orders under section 447A of the Corporations Act 2001 (Cth) modifying the operation of the winding up regime in relation to reporting to creditors.