In the matter of Wiggins Island Coal Export Terminal Pty Ltd

Wiggins Island Coal Export Terminal Pty Ltd applied for orders convening a meeting of secured creditors to consider and, if thought fit, to agree to a proposed scheme of arrangement. The application was heard by the Federal Court of Australia. The primary dispute centred around whether the requirements for ordering such a meeting under section 411 of the Corporations Act 2001 (Cth) were met, specifically whether the company was unable to pay its debts and whether the meeting would be in the best interests of the company's creditors as a whole.

The court needed to decide if the company was indeed unable to pay its debts as a crucial prerequisite for convening the meeting. Additionally, the court had to assess whether calling a meeting to consider the scheme of arrangement was in the best interests of the company's creditors. This involved considering the potential benefits of the proposed scheme to the creditors compared to other available options, such as liquidation.

In its reasoning, the court found that the company was indeed unable to pay its debts, fulfilling the first requirement for convening the meeting. Furthermore, the court determined that holding the meeting to consider the scheme of arrangement was in the best interests of the creditors. The proposed scheme offered a structured repayment plan which was deemed preferable to the uncertainty and potential losses associated with liquidation. Therefore, the court granted the application and ordered the meeting of secured creditors to consider the proposed scheme of arrangement.