In the matter of IOUpay Limited ACN 091 192 871 (Administrators Appointed)

In the Federal Court, the administrators of IOUpay Limited applied for orders to terminate the voluntary administration of the company, arguing that the company was solvent. The company's unsecured creditors were given notice of the application but did not file any submissions in response. The primary legal issue before the court was whether the company was solvent, such that the administration should be terminated. A secondary issue was the relevance of debt falling due in 13 months' time in the analysis of the company's present solvency.

The court noted that there was no dispute that the company was solvent at the date of the hearing. However, the administrators argued that the company would not be solvent in 13 months' time, when debt falling due would not be able to be met from the company's assets. The court rejected this argument, stating that the question of present solvency should be determined on the basis of the company's financial position at the date of the hearing, rather than on the basis of a prediction about its financial position in the future. The court also noted that the administrators' evidence did not support a conclusion that the company would not be able to meet its debts when they fell due. The court concluded that the company was solvent and ordered that the voluntary administration be terminated.