- Apostolou v VA Corporation of Australia Pty Ltd

Judgment 1By Originating Process filed on 15 February 2013, the Plaintiffs, the liquidators of Plaza West Pty Limited (in liquidation) (subject to deed of company arrangement) ("Company") seek an order under s 482(1) of the Corporations Act 2001 (Cth) that the winding up of the Company be stayed indefinitely or terminated. There is a degree of commercial urgency in the application, since the terms of a Deed of Company Arrangement ("DOCA") in respect of the Company and certain ancillary arrangements have provided that interest on certain facilities is not charged to 5 March 2013, but will recommence from that date, subject to the terms of those arrangements. 2The application for termination of the winding up is supported by affidavits of the two liquidators, Mr Sutherland and Mr Kukulovski, an affidavit of the administrator, Mr Baxendale, and an expert report of Mr Meredith dealing with the Company's solvency. There is evidence of service of the Originating Process and Mr Sutherland's affidavit upon creditors or their representatives and on the Australian Securities and Investments Commission ("ASIC"). Creditors were also advised of the listing of the proceedings but no creditor appeared and sought to be heard when the matter was called. ASIC has also advised that it does not seek to be heard in respect of the application. Background 3By way of background, the Company was incorporated on 16 May 2000 to undertake a substantial property development at Parramatta. An affidavit of Mr Sutherland, one of the liquidators, sworn 14 February 2013 sets out the steps taken by the Company in respect of that development, which included the acquisition of the land for $7.5 million, borrowings by the Company from shareholders and related entities by unsecured loans and a borrowing from a third party lender on a secured basis. The Company also obtained construction funding from a related company, Dyldam Developments Pty Limited ("Dyldam"), secured by unregistered real property mortgages over that property and engaged Dyldam to develop the site. It appears there were then a range of difficulties in respect of the development, including the impact of the global financial crisis, delays in development approvals, and a substantial dispute with an excavation contractor in respect of which the Company obtained but was unable to recover a substantial judgment. 4The liquidators were appointed by resolution of the Company's members on 10 July 2012 and issued an initial report to creditors on 19 July 2012 and a second report to creditors on 13 December 2012. 5On 14 December 2012, after a proposal for a DOCA was made by the Company's sole director, the liquidators resolved to appoint Mr Guy Baxendale as voluntary administrator of the Company pursuant to s 436B of the Corporations Act. A first meeting of the Company's creditors in respect of the voluntary administration took place on 28 December 2012. 6A deed proposal was made by the Company's sole director on 13 January 2013. That proposal, and the DOCA ultimately approved at the second meeting of the Company's creditors, provided for a deed fund comprised of a substantial money payment by the Company's director, the balance of monies held by the administrator and liquidators, debtor receipts due to the Company from December 2012 - February 2013 and the proceeds of the assignment of a chose in action and provided that certain related party creditors would not prove under the DOCA. 7The administrator issued a second report to creditors on 21 January 2013 and a supplementary report on 25 January 2013. Those reports were comprehensive. They noted that the Company had property assets valued between $17 million and $20 million, depending on the manner in which they were sold; there was a first registered mortgage over the Company's property in favour of Project 1876 Pty Limited ("Project 1876") which had taken an assignment of that mortgage from Bank of Western Australia Limited on paying out the amount due to it; and a second mortgage in favour of Brisbane Estate 88 Pty Ltd ("Brisbane Estate"), which had not then been stamped but was apparently stamped by the time of the second meeting of creditors. 8The administrator's second report identified, and conducted a very comprehensive analysis of, potential causes of action available to the Company including potential claims for insolvent trading against directors; several payments to related parties which may be preferential in character, and possible claims in respect of uncommercial transactions in respect of the transfer of properties to related parties. The administrator rightly noted that recovery would depend on the outcome of any proceedings brought by the liquidator and also upon the liquidator's ability to fund those proceedings. The administrators estimated the outcome of a winding up at a range between nil and 6¢, potentially increased by up to a further 6¢ if a liquidator was able to successfully challenge the second mortgage to Brisbane Estate. The administrators compared that outcome with a recovery of approximately 6¢ under the DOCA and noted the greater certainty of outcome under the DOCA. 9The second meeting of creditors took place on 30 January 2013, at which creditors approved entry into the proposed DOCA. The DOCA was executed on 14 February 2013 and an addendum to it was executed on 20 February 2013, in each case within the time period specified in s 444B of the Corporations Act. The addendum provided for payment of the liabilities, remuneration and expenses of the liquidators, which had been contemplated by the original DOCA proposal put before creditors and approved at the second meeting, but omitted from the original DOCA that had been executed. I am satisfied that the original DOCA and the addendum to it can together be read as a DOCA executed in accordance with s 444B of the Corporations Act. 10On 22 February 2013, the liquidator consented to the Company issuing shares to certain related party creditors in order to capitalise their debts, and on the same date shares were issued to various parties that had executed Deeds of Capitalisation. Applicable legal principles 11Section 482 of the Corporations Act provides that, at any time during a Company's winding up, the Court may make an order, inter alia, staying the winding up indefinitely or terminating the winding up on the day specified in the order. 12The liquidators have standing to bring an application under that section under s 482(1A)(a). Section 482(2A) specifies certain matters that the Court must consider where an application under that section is made in relation to a company that is subject to a deed of company arrangement, to which I will refer below. The liquidators note that, in Mercy & Sons Pty Ltd v Wanari Pty Ltd [2000] NSWSC 756; (2000) 157 FLR 107; (2000) 35 ACSR 70, Austin J left open the possibility that, by contrast with a winding up ordered by the Court, a voluntary winding up would automatically terminate when creditors subsequently approved a deed of company arrangement. His Honour there noted (at [39]) that that outcome would not be irrational since: "Although the Court may under s 511 exercise the powers that it has in a court-ordered winding up, voluntary winding up is a procedure less subject to judicial supervision and considerations of the public interest than court-ordered winding up. This is why a voluntary winding up typically comes to an end, under s 509, without any application to the Court of the kinds contemplated in a court-ordered winding up by s 480-s 482." 13The liquidators do not seek to contend for that position in this application, and the question has not been fully argued before me. The Court has power to terminate a voluntary winding up under s 482 of the Corporations Act, since s 511 of the Corporations Act allows it to exercise the powers in a voluntary winding up that it could exercise in a court-ordered winding up. It seems to me that the Court may properly exercise that power without needing to resolve the question to which Austin J referred which the liquidators do not seek to have resolved in this application. 14Relevant factors in an application to stay or terminate a winding up under s 482 of the Corporations Act were identified in Mercy & Sons Pty Ltd v Wanari Pty Ltd above, Re Nardell Coal Corporation Pty Ltd [2004] NSWSC 281; (2004) 49 ACSR 110 and summarised by Austin J in Vero Workers Compensation (NSW) Ltd v Ferretti Pty Ltd [2006] NSWSC 292; (2006) 57 ACSR 103 at [17] as including the interests of the Company's creditors, including future creditors; the interests of the liquidator, particularly with regard to costs; the interests of contributories and the interests of "the public", including the public interest in matters of commercial morality, and the public interest that insolvent companies should be wound up. Generally, the Court will not terminate a winding up so as to restore control of a company to its shareholders and directors unless the company will have additional financial strength and stability to provide confidence that it can continue without an appreciable risk of returning to liquidation: Re Data Homes Pty Ltd (in liq) [1972] 2 NSWLR 22 at 27; Leveraged Equities Ltd v Hilldale Australia Pty Ltd [2008] NSWSC 190; (2008) 28 ACLC 182; Re SNL Group Pty Ltd (in liq) [2010] NSWSC 797. 15Where, as here, an application for termination of the winding up arises in the context of entry into a Deed of Company Arrangement, then the policy underlying Part 5.3A of the Corporations Act is also relevant. In Mercy & Sons Pty Ltd v Wanari Pty Limited above at [53] Austin J observed that: "If the company applies for an order terminating the winding up after its creditors have approved a deed of company arrangement, the objects of Pt 5.3A are relevant matters, and in many cases they will be matters of great importance. Young J acknowledged their importance in Re Depsun, for example. Section 435A cannot be disregarded where the question of termination of a winding up arises in an administration context, whether the issue is presented under s 482 or under some provision of Pt 5.3A, such as s 447A. The concerns reflected in the case law, including the pre-1993 case law which was mainly decided in the context of creditors' schemes of arrangement, will remain, but the court will evaluate the application for termination in light of all the facts, including the terms and effect of the deed." 16In Vero Workers Compensation (NSW) Ltd v Ferretti Pty Ltd above at [18], Austin J accepted that, where termination is sought of the winding up of a company that is subject to a deed of company arrangement, the public interest must be viewed in the context of the purposes of Pt 5.3A and, specifically: "...it is relevant to consider whether the arrangements adopted in the deed of company arrangement are likely to maximise the chances of the company, or as much as possible of its business, continuing in existence: see s 435A(a). In assessing these matters, there is no absolute rule that a winding up cannot be terminated as long as one or more debts of the company remain undischarged: Mercy v Wanari at [48]." 17In Sutherland v Rahme Enterprises Pty Ltd (in liq) [2003] NSWSC 673; (2003) 46 ACSR 458, Barrett J recognised the relevance of that matter, although also pointing to the significance of public interest factors, observing (at [27]) that: "Part 5.3A's objective of obtaining for creditors a better return than they would receive in an immediate winding up may be accepted as a factor to be taken into account in a case where a deed of company arrangement is promoted and termination of winding up forms part of the overall plan in which the deed of company arrangement plays a part. But it seems to me that the public interest factors of the Data Homes kind are in no way relegated when the application to terminate the winding up eventually comes before the court. The interest of creditors (or, as it is here, a section of them) in obtaining a more favourable return through the deed of company arrangement cannot, to my mind, justify the court's re-launching a company which, viewed alone and in the context of its future activities or likely activities, presents a potential for a new group of creditors to be unacceptably prejudiced by legacies from its former life." The interests of creditors and the Company's solvency 18In Gematech Pty Ltd v Bardi Investments Pty Ltd [2008] NSWSC 196 at [26]-[27], Hammerschlag J pointed to the need for the "fullest and best" evidence of the company's solvency in an application of this kind. In Re Pine Forests of Australia (Canberra) Pty Ltd [2010] NSWSC 1127 at [3], Barrett J formulated a central question in an application under s 482 as: "... whether the company's financial health is such that it may safely be released from the form of external administration focussed mainly on the interests of creditors and returned to the mainstream of commercial life where it may, under the control of its directors, incur new debts that have to be paid as and when they fall due. A capacity to operate in a financially sound and responsible way and to service foreseen indebtedness is central to the inquiry." In Re SNL Group Pty Ltd (in liq) above at [24], Bergin CJ in Eq similarly observed that: "it is clear that in determining whether to terminate the winding up of a company, it is usual that the most significant matter for consideration is the solvency of the Company. The other considerations, such as the extent of the creditors, the status of the debts and the nature of the company's business will be taken into account in determining whether the company has returned to, or will be returned to solvency." 19I am satisfied that the interests of the Company's present creditors would be served by termination of the winding up so to facilitate the implementation of the DOCA. The administrator, Mr Baxendale, had provided comprehensive information in his report and supplementary report concerning the potential outcomes of liquidation on the one hand and the DOCA on the other, including a detailed assessment of the prospects of recoveries in a liquidation. The conclusions that he reached are broadly comparable with those set out by the liquidators in their evidence. Those recoveries would depend on funding for litigation which neither the Company's major third party creditor, the Australian Taxation Office, or a litigation funder have been prepared to provide and Mr Baxendale rightly recognised that claims for recoveries by the liquidator would take some time to resolve and would have the usual risks of litigation. On the other hand, the DOCA delivered an outcome consistent with the upper range of potential recoveries in a liquidation and, importantly, the largest third party creditor, the Australian Taxation Office, seconded the resolution to execute the DOCA which was supported by all creditors (other than the Land Titles Office which abstained) at the second meeting of creditors. There is evidence that substantially all the monies due to the deed fund established by the DOCA have been paid into it; the administrator has confirmed that the anticipated distribution from that fund is consistent with the information provided to creditors at the second meeting; and, unless there are appeals from his adjudication of proofs of debt, he anticipates that payment of a dividend to creditors would be made under the DOCA within 10 weeks. 20It is also necessary to have regard to the position of future creditors of the Company. Substantial steps have been taken to seek to restore the Company's solvency. With the liquidators' consent, the Company has increased its share capital and allocated shares to several related parties in partial or complete satisfaction of debts owed to them by the Company, and each of those creditors has executed Deed Polls accepting the receipt of those shares in discharge (or, as applicable, partial discharge) of their respective debts. One of those related parties, Brisbane Estate, has partly capitalised its debt, which is reduced from approximately $10.5 million to $4.5 million, agreed not to charge interest for the period to 5 March 2013 (a date which, I note, underpins the commercial urgency of the matter) and agreed to vary the rate of interest charged from a default rate to a commercial rate of interest following the liquidators' removal. Although another related party, Project 1876, has not capitalised its debt which is in excess of $12 million, it has agreed not to charge interest to 5 March 2012 and to vary the rate of interest to a commercial rate following the removal of the liquidators. (I note that there was an inconsistency, to which Counsel for the liquidators drew attention, between the recitals and the operative provisions in the Deed Polls as to when the change in interest rate took effect. The operative provisions have the effect which I have noted above, and I proceed on the basis that it is common ground between all parties that that is the intent and effect of the relevant Deed Polls.) 21The liquidators rely on the report of Mr Doug Meredith, a partner of their firm who has substantial expertise. Mr Meredith has reviewed the Company's proforma balance sheet outlining its assets and liabilities, if the winding up is terminated, and a cashflow analysis prepared by the Company's accountants, and has also reviewed relevant documents underlying the balance sheet and cashflow analysis, including, for example, a valuation of the Parramatta development commissioned by the liquidators, copies of relevant leases and residential tenancy agreements for the properties that are generating income, the terms of a working capital facility to be provided by Dyldam, the agreements for capitalisation of the debts owed by the Company to related parties to which I have referred above and loan agreements and associated agreements between the company and other associated entities. 22Mr Meredith has expressed the view, first, that the Company will have, on termination of the liquidation, an excess in value of assets over liabilities of nearly $7 million and will therefore meet the balance sheet test of solvency. I note that that view reflects the gross realisation market value of the relevant properties, as assessed by the property valuation obtained by the liquidators. However, even if the lower valuation figure for sale in one line identified in that valuation were adopted, the Company would still have an excess in value of assets over liabilities of $1.5 million. 23Mr Meredith also expresses the view that the Company has reasonable prospects, within the 12 months to 28 February 2014, of being able to meet all of its debts as and when they fall due, including debt servicing, and will thereby meet the test of solvency under s 95A of the Corporations Act. I have given careful consideration to the basis on which Mr Meredith has reached that conclusion and, in particular, certain agreements between the Company and related parties on which he has relied. Mr Meredith rightly recognises that the Company continues to have liabilities to two related entities, Brisbane Estate and Project 1876, secured over the Company's properties by way of mortgages and fixed charges. An amount in excess of $4.5 million is due to Brisbane Estate after the conversion of a significant part of its original debt to equity and an amount in excess of $12 million is due to Project 1876. Mr Meredith's report takes into account repayment of interest, but not principal, on those loans within the 12 month period to which he refers, because each of those lenders has provided an irrevocable confirmation that it will not require repayment of principal without two months written notice, which may not be given before 30 June 2014. The cashflow analysis undertaken by the Company's accountants, and reviewed by Mr Meredith, indicates that the likelihood that the Company can meet its debts as and when they fall due on that basis. 24It is necessary to consider the position if, contrary to the irrevocable undertakings they have given, Brisbane Estate or Project 1876 sought to require repayment of principal within that 12 month period or, after that period elapses, then require repayment of the principal. It is necessary to address the former possibility because, as the Courts have recognised in respect of contractual subordination arrangements, such arrangements are vulnerable to subsequent variations agreed between the parties, at least where they are not reflected in undertakings given to the Court: Sutherland v Rahme Enterprises Pty Ltd (in liq) above. It is also necessary to address the second possibility because the arrangements between the Company and their related parties do not provide even a contractual undertaking that those related parties will not seek to require repayment of principal after 30 June 2014. 25It might well not have been sufficient to support an order for termination of the winding up, on the basis of the authorities to which I have referred above, if the position were that the company was solvent within the 12 month period only because its secured lenders were not requiring repayment of principal in that period and the Company's solvency beyond that 12 month period depended on whether secured lenders then required such a payment, in circumstances that they had left themselves free to do so. Had that been the position, then there would have been a real risk that the Company might find itself in late 2014 in much the same position as it now is, with related parties relying on their securities, the Company once again in administration or liquidation and unsecured creditors who had dealt with the Company in that 12 month period again exposed to the risks of insolvency. I have given careful consideration to that risk, which was the most difficult issue raised by this application. However, I have ultimately concluded that that is not a proper characterisation of the position, because of the evidence as to the excess of the Company's assets over its liabilities, on the basis of an independent valuation commissioned by the liquidators and not by interests associated with the Company. As I noted above, that excess is substantial if the several parts of the development are realised separately and is still in excess of $1.5 million if the development is realised at valuation in a sale in one line. 26The test of solvency has regard, of course, to the Company's ability to realise its assets within a reasonable time so as to meet its liabilities. If the secured lenders were in fact to require repayment of principal after 30 June 2014, then the evidence before me suggests that the Company should, in a worst case, be able to realise its property in a manner that would allow it to discharge its debts. Obviously, that prospect can never be certain since it necessarily depends on economic conditions at the relevant time and in part on the level of the Company's unsecured debts at that time. However, by contrast with other decisions in which Courts have declined to terminate a winding up where a company's solvency is only supported by contractual arrangements with related parties, it seems to me that the Company's solvency is here supported by the capitalisation of debt that has the result that the value of the Company's assets significantly exceeds the amount of its debt. I am therefore satisfied that the interests of future creditors are not at risk in a manner which would require the Court to decline to terminate the winding up. The liquidators' and contributories' interests 27The termination of the winding up is not contrary to the liquidators' interests since the DOCA (as supplemented by the addendum to it) provides for payment of their fees. The termination of the winding up is in the interests of the Company's three contributories, one of whom voted in favour of execution of the DOCA in its capacity as creditor and two of whom entered Deed Polls capitalising their debts in order to facilitate the arrangement. A third contributory has been deregistered but ASIC was given notice of the hearing and, as I noted above, does not seek to oppose the orders sought. Whether there is any public interest reason not to terminate the winding up 28Questions of commercial morality may give rise to reason not to terminate a winding up where there is serious impropriety in the conduct of the company's affairs or significant risk to future creditors. In Gematech Pty Ltd v Bardi Investments Pty Ltd above at [26]-[27], Hammerschlag J noted that the Court will have regard, in such an application, not only to creditors' interests but also to the public interest, including whether granting the order would be detrimental to commercial morality. In Prendergast v Rolcross Pty Ltd (in liq) [2008] NSWSC 146 at [25], White J directed attention to the question: "... whether it appears that it would be, or may be, contrary to the public interest if the company were permitted to resume operations." His Honour also noted that, where shares in a company are closely held the public interest means primarily the interests of existing and future creditors. 29In Apostolou v VA Corporation of Australia Pty Ltd [2010] FCA 64; (2010) 77 ACSR 84 at [14], [58], Finkelstein J noted that there may be exceptional cases where a stay of a company's winding up would not be granted when the company was solvent, but noted that such an order would usually be made if all the creditors are paid out, the liquidator's costs and expenses are covered and the members agree; see also the careful review of the case law in Re Kitchen Dimensions Pty Ltd (in liq) [2012] VSC 280 at [22]ff. In Re R.A.N.S. Pty Ltd [2012] VSC 480 at [18], Sifris J emphasised that issues as to the previous conduct of the company's affairs were likely to arise in respect of the assessment of its future conduct, observing that: "... the critical focus of the application is on the future of the company and in particular the risk of danger to future creditors. Previous issues of non-compliance and breach by a company and its directors are relevant to the intended future operation of the company, particularly where the breach or non-compliance is sufficiently serious or persistent to the extent that the court can have no confidence that the restored company will continue to operate as a good 'corporate citizen' according to law." His Honour there held that, notwithstanding some concerns as to a director's previous conduct, a winding up should be terminated where the Company would be solvent after a debt for equity swap; creditors' claims had been addressed by a deed of company arrangement entered into in accordance with Pt 5.3B of the Corporations Act and neither ASIC nor any creditor had applied to set aside that deed of company arrangement. His Honour there pointed to the objectives of Pt 5.3A in maximising the prospect of the Company or its business continuing in existence and noted that the deed of company arrangement in that case "represents a statutorily mandated resolution of the claims arising in wind up of the company". 30There does not seem to me to be any reason to decline to terminate the winding up in the public interest, so far as the interests of present and future creditors are concerned, for the reasons I have noted above. It does not seem to me that the past or proposed operations of the Company are otherwise such as to exclude an order for termination of the winding up, having regard to the authorities to which I have referred above, and in particular the importance of solvency in determining that question. In reaching this conclusion, I have had regard to the detailed reports prepared by the liquidators and administrator and also to the transactions referred to in those reports to determine whether they give rise to any reason that it would be contrary to the public interest to terminate the winding up. 31The liquidators' report to creditors dated 13 December 2012 identified a possible insolvent trading claim against the Company's directors, a possible claim for an unfair preference against Dyldam for $1.7 million or possibly more and possible claims for uncommercial transactions in relation to other related entities. The Liquidators also lodged a report with ASIC under s 533 of the Corporations Act on 19 December 2012, which expressed the view that the Company's books and records were adequate and identified poor economic trading conditions and trading losses as the cause of its failure. The administrator, Mr Baxendale, also lodged a report with ASIC on 22 January 2013, which also expressed the view that the Company's books and records were adequate and identified the possibility of insolvent trading claims in contravention of s 588G of the Corporations Act but also the possibility that directors could establish defences to such claims under s 588H of the Corporations Act and expressed the view, based on the information and documentary evidence available to the administrator, that the case did not warrant inquiry by ASIC. Mr Baxendale's report to creditors under s 439A of the Corporations Act also identifies the possibility of unfair preference and uncommercial transaction claims. The Liquidators have since indicated, in Mr Sutherland's affidavit sworn 14 February 2013, that they adopt the findings in that report. 32The administrator's report dated 21 January 2013 notes that, notwithstanding the assignment of the securities by BankWest to Project 1876 was within the 6 months prior to the winding up of the Company and involved a related party, the administrator considered that Project 1876 would be able to enforce their security. Significantly, it appears that the assignment was undertaken in respect of a payment in excess of $12 million by Project 1876 to BankWest. The liquidators' report to creditors also notes that the unstamped mortgage in favour of Brisbane Estate was provided as security for a drawdown of a loan facility provided to the Company on or around 1 February 2005 and that Brisbane Estate had a total claim including interest in the amount of approximately $10.5 million as at the date of the liquidators' appointment. The administrator's report identifies a possibility that the advances claimed to have been made by Brisbane Estate were made by another party; however the administrator also notes that the Company in fact received the relevant advances between February 2005 and February 2009. While this possibility might be relevant to the enforceability of the security claimed by Brisbane Estate, there is no suggestion of impropriety, for example, in the sense that the relevant funds had not been advanced. 33The liquidators' report raises the possibility of an insolvent trading action against the director and former directors of the Company. The administrator's report expresses the view that the Company likely became insolvent in September 2011, rather than December 2011 as the liquidators had originally considered, but makes clear that this is an "initial view". The liquidators' report also notes that the director and former directors may have "significant" statutory defences should such an action be commenced, and identifies several matters that would found such defences including the Company's then financing facilities, the Company's historical ability to realise its properties in a relatively short period of time to meet liabilities, a reduction in the level of the Company's overall unsecured creditors in the period prior to the liquidators' appointment, the availability of significant financial support to the Company from related party entities, and the fact that the Company's original feasibility study for the development appeared to be sound. These matters tend strongly against any inference of impropriety in that regard. 34The liquidators' report to creditors identified a possible preferential payment to Dyldam on or about 10 February 2012, within the six month period preceding the liquidators' appointment, and the administrator's report also reviewed the circumstances of that payment. It appears the monies paid to Dyldam were drawn down from the BankWest facility and paid to Dyldam between December 2011 and February 2012 on account of monies due to it for the construction of the development. The liquidators also note that Dyldam held an unregistered mortgage over the Company's property as security for the construction funding loan; that they had received legal advice that the mortgage was valid as an equitable security, although unregistered at the time of their appointment; and it was likely that any monies received by Dyldam up to the value of the security which were paid in discharge of the construction funding advance would not be recoverable. Whether or not this transaction would have given rise to a statutory preference claim, the evidence reviewed by the liquidators and administrator does not indicate any element of legal or commercial impropriety about it, so far as Dyldam had in fact provide the relevant construction finance. 35The liquidators also identify potential uncommercial transactions where certain rental payments received from a third party were paid to a shareholder and creditor of the Company and several dealings in which monies from the sale of the Company's properties were not fully received into the Company's bank account. In two cases, it appears that sale proceeds were discounted against debt owed by Dyldam to purchasers, although the effect of that transaction was reflected in a reduction in the amount payable to Dyldam from the Company. In a third transaction, an amount of sale proceeds of a property were received by another related party, Golden Miles, again reducing the Company's liability to it. Five properties were transferred to or on the instructions of another entity under a Deed of Release entered with that other entity. Again, these transactions may well have been attacked as uncommercial transactions, but the evidence before the Court did not indicate there was impropriety in respect of them. The administrator's report also identified the possibility of uncommercial transaction claims in respect of the relevant rental payments and the transfer of the several properties to which the liquidators refer. 36The liquidators' report to creditors also expressed the view that financial records maintained by the Company had complied with s 286 of the Corporations Act and the administrator's report similarly expressed the "preliminary view" that the Company had maintained adequate books and records in accordance with s 286 of the Act. The administrator's report also expresses the preliminary opinion that no breaches of directors' duties, falsification of books, false or misleading statements, false information or other possible offences by directors were established. 37I do not consider that these matters indicate that, where the issue of the Company's future solvency is addressed in the manner that I have set out above, there is reason to consider that there would be risk to future creditors or the public from terminating the winding up. Factors identified in s 482(2A) of the Corporations Act 38As I noted above, s 482(2A) of the Corporations Act requires that, where an application to terminate a winding up is made in relation to a Company subject to a deed of company arrangement, the Court must have regard to, relevantly, any report that has been lodged with ASIC by the administrator or liquidator and that contains an allegation that an officer of the Company has engaged in misconduct. I noted above that the administrator's report pointed to that possibility, in respect of insolvent trading, but also pointed to the possibility that defences would be available to the relevant directors. The Court must also have regard to the decision of the Company's creditors to resolve that the Company execute the deed of company arrangement; and to the administrator's statement under s 439A(4)(b), where the administrator here expressed the opinion that it would be in creditors' interests for the Company to execute the DOCA; and whether the deed of company arrangement is likely to result in the Company becoming or remaining insolvent; and any other relevant matters. I have addressed each of these matters, to the extent to which they are relevant to this application, in the analysis set out above. Orders 39For these reasons, I am satisfied that the Court should make the orders sought in this case. I make the following orders: