Kordamentha Pty Ltd v LM Investment Management Limited (Receivers and Managers Appointed); Re: Kordamentha Pty Ltd

Kordamentha Pty Ltd applied for directions on whether proceedings should be brought against LM Investment Management Limited, which was in liquidation. The applicant sought advice on the best interests of the trust estate, given that the litigation funder, IMF Bentham Limited, would assume liability for adverse costs orders. The applicant also sought leave to proceed against LM Investment Management Limited under section 500 of the Corporations Act 2001, as leave was not obtained at the time the proceedings were instituted. The court considered whether the proceedings would be justified in the best interests of the trust estate, and whether the liquidators should be indemnified for costs incurred on the application.

The court found that the applicant would be justified in prosecuting proceedings against LM Investment Management Limited, but only if IMF Bentham Limited agreed to pay adverse costs orders and notify the defendant of any termination of the litigation funding agreement. The court also found that leave to proceed against LM Investment Management Limited should be granted under section 500 of the Corporations Act 2001. The court ordered that the costs and expenses of the application be paid on the indemnity basis out of the LM Managed Performance Fund.

The court made several orders to protect confidential information, including sealing certain documents and requiring the applicant to make an application to place the proceedings on the Commercial List. The court directed the applicant to serve the claim and statement of claim in the proceedings within 14 days of the order.

The court's decision provides guidance on the considerations for bringing proceedings against a company in liquidation and the role of litigation funders in such cases. The court also highlights the importance of protecting confidential information in trust and insolvency proceedings.