The impact of the Harman undertaking on the use of documents by an eligible applicant in respect of a right to sue assigned by a liquidator.

• Published date: 30 July 2021
• Subject Matter: Insolvency/Bankruptcy/Re-structuring, Insolvency/Bankruptcy
• Law Firm: Piper Alderman
• Author: Mr Mike Hayes and Antony Disciscio

The Federal Court has clarified the ability of an assignee of a claim by a liquidator pursuant to s 100-5 of the Insolvency Practice Schedule to rely upon information and documents obtained from a public examination in private proceedings relating to the assigned claim: LCM Operations Pty Ltd, in the matter of 316 Group Pty Ltd (In Liquidation) [2021] FCA 324.

Takeaways:

• Liquidators are not in breach of the Harman undertaking if documents obtained in an examination are used in subsequent proceedings to get in assets in the liquidation;
• An eligible applicant does not require leave of the Court to use documents obtained in an examination, in subsequent proceedings, if the purpose for which the documents are sought to be used is for the same purpose for which they were obtained under the compulsory process of the Court; and
• An assignee of a claim, who uses documents obtained in an examination in subsequent proceedings, does not pursue a private purpose if the assignment means that the liquidator seeks to pursue the interests of creditors through the assignment.

Background:

316 Group Pty Ltd (In Liquidation) (Company) was a special purpose vehicle incorporated to manage a construction...