In the matter of Recycling Holdings Pty Limited [2015] NSWSC 1016

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Recycling Holdings Pty Limited [2015] NSWSC 1016 Hearing dates: 20, 24 and 25 March 2015 Date of orders: 27 July 2015 Decision date: 27 July 2015 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Application pursuant to Corporations Act, s 445D, for termination of Deed of Company Arrangement (DOCA) dismissed. On application for order declaring DOCA void under s 445G(2), one provision of DOCA declared void and varied; otherwise application dismissed. Application pursuant to s 449B(2) for removal of deed administrators dismissed. On application for termination of winding up under s 482, winding up stayed pending implementation of DOCA. Catchwords: CORPORATIONS – voluntary administration – deed of company arrangement (DOCA) – application to terminate DOCA – whether material omissions from or misstatement in information provided to creditors – objective materiality of information – omission of information regarding company's litigation – where litigation to be pursued if creditors vote in favour of DOCA – held, no material omission in relation to nature, prospects and status of litigation – where potential conflict between director's interest in pursuit of litigation on behalf of company and his personal exposure as a cross-defendant – held, material omission – omission of information regarding potential liquidator's claim to recover voidable transaction – held, material omission – whether court's discretion should be exercised to terminate DOCA – where director despite potential conflict has demonstrated commitment to prosecution of company's litigation – where possible claims to recover voidable transactions preserved if litigation fails to generate dividend of 100c – where no other creditor supports relief sought by plaintiffs in termination application – where plaintiff is defendant in company's litigation – where majority of creditors are related creditors but have real interest in success of DOCA – where disclosure of omitted matters unlikely to affect votes of majority - whether public interest in full and accurate disclosure to creditors compromised by refusal to terminate DOCA – held, DOCA not to be terminated.