PMF Legal is a Sydney-based commercial law firm specializing in corporate and commercial law, with expertise in areas like insolvency, administration, and litigation. The firm has a strong record of successful outcomes for clients and has contributed to changes in legislation. It provides innovative, tailored legal advice to meet each client's objectives. PMF Legal is led by principal Paul Fordyce, an experienced commercial lawyer with accreditation in insolvency law.

1. PMF Legal is a Sydney-based commercial Law firm with a strong record of client
sucesses and landmark court cases, coupled with a proud tradition of offering
cutting-edge legal advice in a commercial context.

2. ABOUT
PMF Legal provides clients with boutique legal advice on corporate and
commercial matters.
The fi rm has been responsible for a series of signifi cant successes for
clients and has been a major contributor in assisting them to protect and
expand their businesses.
The advice provided is cutting-edge, but more signifi cantly is innovative,
tailored and personal to ensure each client’s objectives are met.
Additionally the fi rm has enjoyed more than its fair share of court victories
which have set precedents and contributed to the changing or framing of
new legislation.
PMF Legal is a unique and much respected fi rm with an ethical reputation.
Areas of practice include:
• Corporate insolvency situations
• Voluntary administration
• Deed of company arrangement
• Creditors’ voluntary liquidation
• Members’ voluntary liquidation
• Court liquidation
• Receivership
• Bankruptcy
• Commercial litigation
• Commercial negotiations and solutions
• Commercial contracts
• Major Commonwealth tenders
• Major public company tenders

3. CLIENTS
PMF Legal - Amending the Corporations Law:
Re Crawford House Press Pty Ltd - 13 ACLC 874. Creditors with debts
incurred during a deed of company arrangement were not entitled to receive
any dividend if the deed failed and the company went into liquidation. This
case led to the amendment that brought s553(1A) into the Corporations Law
to ensure that creditors of a failed DCA could participate for a dividend on a
winding up.
McDonald v ASIC - 15 ACLC 1. ASIC’s view was that the report sent by
administrators to creditors in a voluntary administration should contain
information on the “affairs form”. This would have increased the costs of
administrators and reduced the funds available to the creditors of companies.
The Supreme Court of New South Wales ruled invalid the Corporations
Regulation that purported to prescribe that the administrator’s report under
s439A had to be in Form 507 Report as to “affairs”.
McDonald v Deputy Commissioner of Taxation. There appears to be a major
loophole in the Corporations Act that prevents creditors who bring winding-up
applications before the Court from recovering their legal costs if the company
goes into liquidation through a voluntary administration and not an order of
the court. If there is this defect then it will be important for the parliament to
rectify this gap. Some winding-up applications can cost tens of thousands
of dollars. It does not produce a fair result if these creditors are unable to
recovery their costs from the liquidation.
PMF Legal - Innovation:
Employers’ Mutual Indemnity v JST Transport - 15 ACLC 314. This case ruled
that an administrator could use special proxies to vote in favour of a Deed of
Company Arrangement. Workers Compensation insurers wanted to challenge
the Deed because it left them exposed for continuing liability for an insurance
policy where only a portion of the dividends were going to be paid under the
Deed. If the proxies had not been able to be used the proposal for the deed
would have failed to the detriment of the other creditors.
Re Genasys II Pty Ltd - 14 ACLC 729. This case allowed directors of a
company in receivership to appoint an administrator – giving better outcomes
for the unsecured creditors of the company than if the receivership had
merely continued for the benefi t of the secured creditor.
Re Dionys Civil Engineering Pty Ltd 28 ACSR 83. This case allowed a deed
of company arrangement to be completed even though some of the creditors
had decided to try and have the company go into liquidation even though all
of the money due under the deed of company arrangement had been paid to
the deed administrator.

4. CLIENTS
Melbase Corp Pty v Segenhoe Ltd - 13 ACLC 823. This was the fi rst case
to grant leave to a contributory to bring a winding-up application against
a company.
Re Kalblue Pty Ltd - 12 ACLC 1,057. This case allowed the unheard of to
happen - a debtor had the company wound-up!
Re Spargold Enterprises Pty Ltd - 32 ACSR 363. An administrator had a
court advise that where a company under a Deed of Company Arrangement
appeared to be insolvent, then he had an obligation to all creditors and
standing to apply to have the company wound-up.
Re A & D Hagan Pty Ltd – 46 ACSR 434. The Court determined that
administrators had to personally chair the second creditors meeting under a
voluntary administration. They could not appoint someone else to chair the
meeting for them.
PMF Legal - Fighting to Win:
A director of a company that went into liquidation, had been fi ghting to have
a claim that the company had against a secured creditor brought so that the
monies could be recovered and returned to members.
Notwithstanding the client’s usually helpless position as the director of a failed
company, PMF Legal succeeded in having ASIC exercise its rarely called on
power to appoint him as an eligible applicant to conduct examinations of key
people with the secured creditor to investigate the circumstances that led to
the company being put into liquidation. The examinations established that
there was a very good case against the secured creditor. We then succeeded
in having the Court allow our client to bring the company’s action against the
secured creditor.
A client who had no hope of reversing the secured creditors’ alleged wrongful
action was able to bring that action.

5. PEOPLE
Paul Fordyce
Paul Fordyce is the principal and founder of PMF Legal. He has worked
in commercial law and litigation (with an emphasis on insolvency) since
1974. He is an Accredited Specialist in Commercial Litigation (Insolvency)
with the Law Society of New South Wales and is a Full Member of the
Insolvency Practitioners Association of Australia - recently admitted as such
when solicitors became eligible for full membership of this body for the first
time. His membership was granted based on recognition of his standing in
the profession.
Paul has considerable commercial experience which gives him a far greater
understanding of what commercial clients need and expect when seeking
legal assistance. His extensive experience in corporate insolvency has
allowed him to work with insolvency issues as an expert so that he is able
to bring a great deal of imaginative problem solving to this very complex
area of the law. He has specialist experience in a range of industries
including magazine editing and publishing, importation, distribution and
retail businesses.
Additionally, Paul has turned his expertise and leadership to the development
and maintenance of Australia’s largest database on corporate insolvency
information. Located at www.insolvencynotices.com the site is always
current, being updated six days a week - including public holidays.
His experience has included acting on the purchase and sale of businesses,
working on multi-million dollar tenders for Commonwealth government
contracts and for publicly listed private companies. At times this has also
involved being involved in major commercial litigation including cases against
the Commonwealth of Australia, major banks and other fi nancial institutions
and large corporations. One of the leading cases that Paul was involved
in against the Commonwealth of Australia in 1997 resulted in a thorough
review being undertaken by the Commonwealth of its tendering procedures.
This has resulted in much fairer and more transparently conducted
tendering procedures.
Professional Memberships:
• International Federation of Insolvency Practitioners (INSOL)
• International Bar Association (IBA) (Section J - Insolvency & Reconstruction)
• Law Society of New South Wales
• Insolvency Practitioner’s Association of Australia (IPAA)
• International Women’s Insolvency & Restructuring Confederation (IWIRC)
• Member of the Australian Institute of Credit Managers

6. MEDIA
To keep up to date with the latest insolvency news visit our blog at
www.pmflegal.com/blog.
If you would like to subscribe for daily updates go to
www.pmflegal.com/blog/index.php/subscribe

7. FAQ
The following are the key types of insolvency options in Australia:
External Administration/External Administrator
This term applies to companies, the control of which, either total or in part,
has been taken out of the hands of the directors and placed in the hands of
an External Administrator. The External Administrator is usually a company
but in the case of a controller can be a corporation.
Insolvency Practitioner
An Insolvency Practitioner is usually a person but can be a company (in
the case of a controller) appointed generally to take over the control (either
completely or partially) of a company from its directors - either for a short time
or until the company ceases to exist.
Insolvent
Broadly speaking, this is when a company or individual is unable to pay its
debts when they are due for payment.
Liquidator
Liquidator is a term that is used in Australia to refer to a person who acts in
relation to companies that are being wound up. In the case of a Members
Voluntary Liquidation no qualifi cation is required to become the Liquidator,
in the case of a Court Winding Up the person must be an offi cial Liquidator
(with the Court). In the case of a Creditors Voluntary Liquidation or
administration the person must be a Liquidator registered with ASIC.
Restructuring Without Liquidation
There are two ways that a company can re-structure its affairs without
liquidation. This is usually to give the company a chance of continuing
in existence - frequently to enable it to continue to carry on business
but sometimes for other reasons, for example, ones driven by taxation
considerations:
a. A Scheme of Arrangement - is the oldest way of restructuring a company.
It involves the Court being approached for permission to call a meeting
of creditors to consider a proposal outlined to the Court, then put to the
creditors to consider the proposal. Finally, the matter goes back to court for
its final approval after it has been informed of what happened at the creditors’
meeting and to hear any objections to the scheme being approved that any
creditor/member may wish to make.

8. The process is very complicated and expensive. Because of the introduction
of the alternative procedure of Deeds of Company Arrangement (under the
Voluntary Administration provisions), which is quicker and cheaper and does
not require any court involvement, schemes of arrangement are used very
rarely these days for insolvent companies. They are used more for solvent
company corporate restructures.
b. Deed of Company Arrangements - were introduced into the Corporations
Law in 1993 as a cheaper, quicker way of letting a company come to an
arrangement with its creditors without going into liquidation and without
having to meet the many and expensive requirements and procedures
of a Scheme of Arrangement. A Deed of Company Arrangement must be
preceded by a Voluntary Administration.
Secured Creditors
Secured creditors are usually banks or other fi nancial or lending institutions
although they can be smaller companies or individuals that give fi nancial
assistance to a company and have taken a security (like a mortgage) over the
assets of the company. The security usually gives very extensive powers that
let the secured creditor take the control of the whole of the company, or some
of its more important assets, with a view to selling them so that the debt owed
to the secured creditor can be forcibly repaid. For this database these have
been put into two categories:
a. A Receiver - is a person from a fi rm of accountants who is a liquidator
registered with ASIC.
b. A Controller - can be a person or a company, and does not need to be a
registered liquidator although the majority are. A controller is put in control of
a certain part of the property of a company for the purpose of selling it and
paying the proceeds to the secured creditor - up to the amount owed. The
term controller is used in this database to include an agent for the mortgagee
in possession.
Voluntary Administration (VA)
This is the most common type of appointment for a company that is in
financial diffi culties. It is usually a half-way house to a Creditors’ Voluntary
Liquidation or a Deed of Company Arrangement.
In a very few cases the Voluntary Administration simply ends and
the company is returned to the control of its directors. The Voluntary
Administration must end fairly quickly by the company going into a Creditors
Voluntary Liquidation, a Deed of Company Arrangement or being returned to
the control of its directors.
The duration of an administration is usually about a month - but can be
extended by the creditors or the Court.

9. Winding Up (WU)
The purpose of a Winding Up is to sell or otherwise realise all of the assets
of a company, and to fi nalise all of its affairs with a view to then bringing the
company’s existence to an end - a corporate death. There are four main ways
that this happens:
a. Creditors Voluntary Liquidation (CVL) - is a common way for companies
that are insolvent to have their affairs dealt with by an insolvency practitioner.
The essential condition for a Creditors Voluntary Liquidation is that the
company is insolvent. A Creditors Voluntary Liquidation comes about either
as the end result of a Voluntary Administration or as a direct result of the
members of the company determining that the company should go into
liquidation in circumstances where it will not be able to pay its creditors within
12 months of going into liquidation.
Although the members of the company choose the liquidator (insolvency
practitioner), the creditors can change the liquidator (insolvency practitioner)
at a meeting of creditors that follows, usually within an hour or so, the
meeting of members at which the company is put into liquidation.
b. Court Winding Up (CWU) - occurs as the result of a court order. Most
often the order is made because the company is insolvent. Orders are also
made for many other reasons such as a dispute between the directors of the
company that cannot be resolved making the management of the company
unworkable.
c. Provisional Liquidation (PL) - this is a temporary situation for a company.
The court appoints a PL usually where it is convinced that there is an urgent
need to have somebody protecting the assets of the company. It can either
proceed into liquidation from provisional liquidation or it can be returned
to the control of its directors once the court has heard all of the evidence
and determined not to make an order winding the company up. The usual
outcome is a Court Winding Up.
d. Members Voluntary Liquidation - this does not (or should not) involve a
company that is insolvent. Usually such a company is wound up where its
use is no longer required. For example a family business that was conducted
by the parents through a company and they have now retired and closed or
sold the business off. Another common situation is where a large corporation
no longer needs one of the companies in its group.

10. CONTACT
PMF Legal
Level 11, 84 Pitt Street
Sydney NSW 2000
Phone: 61 2 9221 9888
Fax: 61 2 9221 6888
Email: pfordyce@pmflegal.com
www.pmflegal.com