In the matter of Equiticorp Australia Ltd (in liq)

In the Federal Court, the liquidators of Equiticorp Australia Ltd, which is in liquidation, applied for leave to appoint themselves as voluntary administrators for several group companies also in liquidation. The group's liquidations have been ongoing for over thirty years and the liquidators proposed that a voluntary administration and a deed of company arrangement would provide a more efficient and timely finalisation of the liquidations. The court was tasked with determining whether the liquidators should be granted leave to appoint themselves as administrators of the group companies and whether 'truncated administration orders' should be made, as well as whether directions should be given under the Insolvency Practice Schedule.

The court examined the provisions of the Corporations Act, specifically sections 436B(2) and 448C(1), which allow for the appointment of liquidators as administrators, and section 447A, which deals with truncated administration orders. The court also considered the Insolvency Practice Schedule, particularly section 90-15, which provides for directions to be given in the administration of insolvent companies. The court had to balance the interests of the creditors and shareholders of the group companies with the need for an efficient and timely finalisation of the liquidations.

After considering the evidence and arguments presented, the court granted the liquidators leave to appoint themselves as voluntary administrators of the group companies. The court also made truncated administration orders and gave directions under the Insolvency Practice Schedule. The court found that the proposed voluntary administration and deed of company arrangement would provide a more cost-effective and efficient outcome for all stakeholders, including creditors and shareholders. The court noted that the long-standing liquidations had resulted in significant costs and delays, and that the proposed administration and deed would bring a timely end to the process.

The final orders of the court included the appointment of the liquidators as voluntary administrators of the group companies, the making of truncated administration orders, and directions under the Insolvency Practice Schedule. The court emphasised the importance of achieving an efficient and timely finalisation of the liquidations, while also considering the interests of all stakeholders. The court's decision provides a useful example of how the provisions of the Corporations Act and the Insolvency Practice Schedule can be applied in complex and protracted liquidation cases.