Tucker, in the matter of Black Oak Minerals Ltd (Subject to a Deed of Company Arrangement) (in liq)

Black Oak Minerals Ltd, a company in liquidation, is the subject of an application by the deed administrators, Mr Jarrod Villani and Mr Robert Hutson, to the Federal Court of Australia. The administrators seek leave to transfer the company's shares to Ramelius Operations Pty Ltd as part of a deed of company arrangement, and to terminate the company's liquidation. The central dispute revolves around whether the proposed transfer of shares would unfairly prejudice the interests of Black Oak's members and whether the termination of the liquidation is appropriate given the terms of the deed of company arrangement.

The court was required to determine if the proposed transfer of shares would unfairly prejudice the interests of Black Oak's members under s 444GA(1)(b) of the Corporations Act 2001. The court also had to consider whether the termination of the liquidation, as proposed in the deed of company arrangement, was appropriate under s 447A and s 90-15 of the Insolvency Practice Schedule. The court needed to weigh the potential benefits to creditors against the risk of unfair prejudice to members, particularly in the context of a company with no current or future residual value in its shares.

The court found that the transfer of shares would not unfairly prejudice the interests of the members, as there was no residual value in the shares, and the creditors would receive less in a winding up than under the deed of company arrangement. The court held that the proposed deed of company arrangement would provide a trust for creditors and return the company to solvency, which was a significant factor in favour of the administrators' application. The court concluded that the termination of the liquidation was appropriate and ordered accordingly.

The court granted the administrators leave to transfer the shares to Ramelius Operations Pty Ltd and to execute necessary documents for the share transfers. It also terminated the liquidation of Black Oak, effective 7 February 2019, and allowed the administrators to apply for further orders as necessary. The costs of the proceeding were to be paid out of the assets of Black Oak.