Judgment clears way for liquidators to sue Tinkler
The court has approved a funding agreement between Blackwood and the liquidators of Mulsanne Resources - one of Mr Tinkler's failed companies - after Mulsanne failed to buy $28.4 million of Blackwood shares last year, despite agreeing to do so.
The funding agreement means Blackwood will provide the funds for liquidators Ferrier Hodgson to wind up Mulsanne and pursue Mr Tinkler for insolvent trading.
"It does not appear that the liquidator has canvassed other funding options," Justice Ashley Black wrote in his judgment, released on Tuesday. "However, the terms of the [agreement] appear to be more favourable to the company and its creditors than would realistically be available by third parties."
There also seemed to be "little realistic possibility" that Mulsanne's directors would want to fund legal proceedings against themselves, Justice Black noted.
It emerged two weeks ago that administrators Ferrier Hodgson had started proceedings in the NSW Supreme Court against Mulsanne's directors for trading while insolvent. Mr Tinkler is a director of the company, with business partners Matthew Keen and Troy Palmer.
Ferrier Hodgson claims all three Mulsanne directors allowed the company to trade while insolvent last year. The insolvency of Mulsanne arose from its inability to pay $28.4 million for more than 94 million Blackwood shares.
Frequently Asked Questions about this Article…
The Supreme Court approved a funding agreement that clears the way for liquidators to pursue legal action against Nathan Tinkler, by allowing Blackwood to fund the liquidators (Ferrier Hodgson) as they wind up Mulsanne Resources and pursue claims for alleged insolvent trading.
Under the approved funding agreement, Blackwood will provide the funds for Ferrier Hodgson, the liquidators and administrators, to wind up Mulsanne Resources and to bring legal proceedings against Mulsanne’s directors over alleged insolvent trading.
Blackwood agreed to fund the liquidators after Mulsanne failed to pay $28.4 million to buy more than 94 million Blackwood shares as it had agreed to do. The court noted the funding terms appear more favourable to the company and its creditors than realistic third‑party options, and that Mulsanne’s directors were unlikely to fund proceedings against themselves.
Administrators Ferrier Hodgson allege that Nathan Tinkler and fellow directors Matthew Keen and Troy Palmer allowed Mulsanne Resources to trade while insolvent last year, with the insolvency arising from Mulsanne’s inability to pay $28.4 million for Blackwood shares.
The proceedings name Nathan Tinkler as a director of Mulsanne Resources, along with his business partners Matthew Keen and Troy Palmer.
In this context, 'trading while insolvent' refers to the claim that Mulsanne continued operating while it was unable to pay its debts—specifically its failure to pay $28.4 million for Blackwood shares—which led Ferrier Hodgson to start court proceedings against the directors.
Justice Ashley Black noted the liquidator did not appear to have canvassed other funding options, but he found the terms of the Blackwood agreement to be more favourable to the company and its creditors than would realistically be available from third parties, and observed directors were unlikely to fund actions against themselves.
Ferrier Hodgson has already started proceedings in the NSW Supreme Court against Mulsanne’s directors for alleged insolvent trading, and Blackwood will fund the liquidators to wind up Mulsanne and pursue those claims. Investors should follow court filings and announcements from Blackwood, Mulsanne’s administrators, and any updates on the legal action.
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