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+ WPS Motorsport and Admininstrations

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Author: Leigh Adams

In DCT-v-WPS Motorsport Pty Limited [2009] FCA 476, the ATO applied to wind up a company in insolvency after the company failed to comply with a statutory demand. However, an administrator was appointed the day before the hearing of the winding up application.

The Court has to decide whether it was satisfied that it was in the interest of creditors for the company to continue under administration rather than to be wound up: s440A(2) of the Corporation Act.

The Court was not satisfied that an adjournment of the winding up application was in the interest of creditors or was otherwise warranted. It ordered that the company be wound up in insolvency and in doing so, the Court said the company was 'not just insolvent, but spectacularly so'.

,p>His honour Logan J said "The difficulty is in finding substance even at this preliminary stage in what WPS Motorsport has to offer. I am very conscious, as the authorities highlight, that substance may be revealed in the course of an administrator's investigating the affairs of the company and reporting to creditors. Nonetheless, it seems to me that there should at least be raised the existence of an asset which is the subject of the proposed transaction and there is just no evidence at all. All that there is (sic) some vague reference in terms to which I have referred."

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