A recent judgment of Justice Derrington in R.W. Pascoe Pty Ltd v Crimson Fresh Produce Pty Ltd (subject to deed of company arrangement) [2023] FCA 705 highlights the supervisory role to be played by the courts to ensure that a deed of company arrangement (DOCA) is for a proper purpose.
In this case, the court ordered that the DOCA be terminated on the grounds that it was for an improper purpose and not consistent with the objectives of Part 5.3A of the Corporations Act 2001 (Cth) (Corporations Act). The court held that there was no real benefit to creditors and that the effect of the DOCA was to avoid investigation into the affairs of the company.
Background
Crimson Fresh Produce Pty Ltd (Crimson Fresh) operated a produce growing and exp…
Read the full article at: https://www.landers.com.au/legal-insights-news/purpose-vs-effect-federal-court-terminates-doca