Charting the Limits of Insolvency Reorganisations: Lehman Brothers Holdings Inc v City of Swan
- The University of Sydney Press
- Publication Type:
- Journal Article
- Sydney Law Review, 2010, March, 32 (1), pp. 141 - 158
- Issue Date:
Australia's corporate insolvency regime strives to provide flexible measures that allow stakeholders of a financially distressed company to come to a mutually beneficial arrangement. As with all insolvency laws, it is possible to bind dissenting creditors to the will of the majority in resolving these disputes. How nexible should corporate insolvency law be in facilitating corporate reorganisations? To what extent can/should individual creditors be forced to limit their rights against other stakeholders in the insolvency, including rights against third parties, in the name of collective benefit? This important question has recently been the subject of conflicting statements in several Federal Court decisions. After an expedited hearing the High Court dismissed an appeal from one of these Federal Court decisions in the Lehman Brothers case on 30 March 2010 and will release its reasons on 14 April 20 I O. This note considers the legal and policy issues involved in this matter.
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