The NSW Supreme Court has cleared the path for Nathan Tinkler to be sued by liquidators for allegedly allowing one of his companies to trade while insolvent.
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 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, along 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 to Blackwood.
After it failed to come up with the money on time, Blackwood filed an application to have the company wound up. Mulsanne did not defend the application to wind up.
During public examinations, Mr Tinkler and Mr Keen said Mulsanne did not have the money to pay for the shares itself but that they believed they would be able to come up with the money from the sale of a royalty stream controlled by the Tinkler Group.
But Mulsanne failed to deliver on the purchase for more than 94 million Blackwood shares.
Mr Tinkler has sold several large assets in recent months.