This week’s TGIF considers a recent decision of the Federal Court of Australia (Commissioner of State Revenue v McCabe (No 2) [2024] FCA 662), where Justice Derrington determined that potential tax fraud and evasion did not justify the termination of a DOCA on ‘public interest’ grounds.
Key Takeaways
- Any challenge to a DOCA must be accompanied by sufficient evidence that creditors would be worse off under the ongoing DOCA than a liquidation, and that there has been substantial wrongdoing on the part of the directors to warrant the DOCA’s termination.
- There may be commercial reasons to depart from general distribution principles where the purpose of the DOCA is to return and keep a company solvent. What is…
