Morgan, in the matter of Traditional Values Management Limited (in liq)

In the case of Morgan, in the matter of Traditional Values Management Limited (in liq), the liquidator sought orders under the Insolvency Practice Schedule (Corporations) to implement an abridged process for handling claims from investor creditors against the company in liquidation. The key issues included whether the responsible entity, TVM, was entitled to use the assets of the managed investment scheme to meet claims and whether the proposed process should be "opt out" or "opt in". The court had to decide on the appropriate approach for handling claims from investors who acquired units through dividend reinvestment and whether they should be excluded from the abridged process.

The court found that the proposed abridged process was suitable for the claims of affected investors but should not extend to investors who acquired units by reinvesting dividends. The court also ruled that the abridged process should not exclude any investor or class of investor, allowing non-affected investors to lodge proofs of debt and affected investors to opt-out of the abridged process if they wished. The court emphasised that the abridged process did not involve a "global proof" which could conflate several and joint rights, a concern previously noted by Sloss J in Re Horne.

The court granted the liquidator's application, allowing him to use the assets of the managed investment scheme to pay the claims of affected investors, Rice & Reynolds investors, and any other investors admitted in the liquidation. The orders included steps for distributing notices to investors and requiring them to prove their debts or claims within 60 days. The court also ruled that the liquidator was justified in not providing a response to affected investors who elected to prove for a claim in accordance with the simplified adjudication process.

The final orders included distributing notices to all investors, admitting affected investors as unsecured creditors, and allowing the liquidator to pay claims from the managed investment scheme's assets. The costs of the application were to be paid from the managed investment scheme's assets.