Following a successful application by ASIC, the Supreme Court of Victoria has made a declaration that the appointment of Mr Gideon Rathner as voluntary administrator of Planet Platinum Ltd (Planet Platinum) on 4 May 2015 was invalid, void and of no effect.
In making the declaration, the Court found that the only reason the directors had appointed Mr Rathner as an administrator was for the improper purpose of stopping ASIC from appointing a provisional liquidator to the company, and not because they had formed a view that it was insolvent or likely to become insolvent.
The Court also found that Mr Rathner failed to take reasonable steps to confirm the validity of his appointment and that based on the information he had at the time, there was an insufficient basis for him to be satisfied that Planet Platinum was either insolvent or likely to become insolvent.
The Court ordered that Mr Rathner pay the sum of $136,594 to the liquidator of Planet Platinum, being a sum of money received by Mr Rathner from the company and over which he claimed a lien. Mr Rathner will be entitled to make a claim for payment from the liquidator for any work that Mr Rathner completed which benefitted Planet Platinum, with the liquidator to assess that claim in due course.
ASIC Commissioner John Price said, 'The Judge's decision is a reminder that insolvency practitioners must be satisfied of the validity of an appointment before accepting appointments as administrators.’
On 21 April 2015 filed an application with the Court seeking the wind up of Planet Platinum and the appointment of a provisional liquidator. On 4 May 2015—and prior to the hearing of ASIC’s application—the Planet Platinum board (consisting of Mr John Trimble and his son, Mr Michael Trimble) appointed Mr Rathner as an administrator of the company.
Under 463A of the Corporations Act 2001, a company may appoint an administrator only if the board holds a bona fide opinion that the company is insolvent or likely to become insolvent.
On 12 June 2015 the Court appointed Mr John Lindholm as provisional liquidator Planet Platinum and terminated Mr Rathner’s administration. (Refer: 15-365MR)
On 7 September 2015 the provisional liquidator provided a report to the Court that concluded that Planet Platinum was not insolvent at the time of Mr Rathner’s appointment as administrator.
On 1 December 2015, the Court ordered the wind up of Plant Platinum and the appointment of Mr Lindholm as liquidator. (Refer: 15-146MR)
On 4 May 2016 the Court ordered that Mr Rathner pay ASIC's costs relating to its application.