SETTING ASIDE DEEDS OF COMPANY ARRANGEMENTS UNDER CORPORATIONS ACT S.447A

by Peter Tree SC

A. OVERVIEW AND SUMMARY

1. The Corporations Act provides for specific instances in which a deed of company arrangement (“DOCA”), or the resolutions of creditors which underpin it, may be terminated[1] or set aside[2] by the Court.  The purpose of this paper is not to deal with such specific statutory instances, but rather to deal with the residual or additional powers in relation to DOCAs under s.447A.

2. The circumstances in which a party may be motivated to seek an order under 447A broadly fall into two categories: firstly, where the deed unfairly discriminates against a creditor; and secondly where for other reasons the DOCA is desired to be terminated, but liquidation avoided.  This paper will consider the applicable law and discretionary considerations which prevail in relation to an application under the section.