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Former Arrium directors “had reasonable grounds to suspect insolvency”

Dispute Resolution & Litigation, Restructuring & Insolvency
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Three separate legal actions spawned by the collapse of the Arrium Group in 2016 commenced this week in the NSW Supreme Court.

Arnold Bloch Leibler, led by partner Caroline Goulden, is representing Arrium Liquidators from KordaMentha, in their insolvent trading action against 10 of the Group’s former directors.

In what has been described by the Australian Financial Review as one of the biggest corporate cases in years, liquidators of collapsed mining and steel making giant Arrium have submitted that the Arrium board “had reasonable grounds to suspect insolvency or that it would become insolvent and unable to pay its substantial debts, which matured in July 2017, July 2018 and beyond”.

Counsel for the Liquidators, Michael Borsky, QC, submitted that Arrium “could not put off its day of reckoning with lenders indefinitely. It was always clear on the timelines provided to the board. The directors always knew lender agreement would be required and would likely be difficult to obtain for a debt restructure”.

The three proceedings are expected to run concurrently over 40 days.

To read the Australian Financial Review article, click here.

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