Paper: Implications of the Federal Court's decision in the Lehman Brothers collapse
In brief: In City of Swan v Lehman Brothers Australia Ltd, the Full Court of the Federal Court unanimously held that section 444D of the Corporations Act 2001 (Cth) (the Corporations Act) does not authorise a deed of company arrangement that releases or compromises creditors' claims against third parties.
The decision was handed down only weeks after another unanimous decision of the Full Federal Court in Fowler v Lindholm, in the matter of Opes Prime Stockbroking Limited, where it was held that third party releases are permissible in schemes of arrangement under section 411 of the Act. The decision in Lehman is significant not only because of the Full Court's findings on the scope of Pt 5.3A of the Act, but also because the Court made some observations on the decision in Opes. The High Court of Australia has granted special leave to appeal in Lehman. The findings in Opes are likely to be the subject of argument in the Lehman appeal.
For more, download the paper (as an adobe acrobat pdf – 234KB).
For further information, please contact:
- Michael QuinlanPartner,
Sydney
Ph: +61 2 9230 4411
Michael.Quinlan@aar.com.au - Michael IlottPartner,
Brisbane
Ph: +61 7 3334 3234
Michael.Ilott@aar.com.au
