Former coal baron Nathan Tinkler has reached a settlement with ASX-listed Blackwood Corporation in which his company would pay less than half the $28.4 million of debts that originate from a failed share placement.
Blackwood told the market on Tuesday that it would drop liquidation efforts against Mr Tinkler and other directors of his private company Mulsanne Resources if a payment of $12 million was made by June 30.
Blackwood said the payment could be made by any of the companies linked to Mr Tinkler, and any asset sales across Mr Tinkler's empire must be used to resolve the debts.
Liquidators had started legal action against Mr Tinkler and other directors of Mulsanne Resources for insolvent trading, but Tuesday's deal freezes that action pending payment.
Failure to pay by June 30 will see the legal action resumed on July 1.
Mr Tinkler's companies have missed payment deadlines in the past and Blackwood said it continue to monitor the recoverability of monies closely until they were paid.
A spokesman for Mr Tinkler released the following statement: "The Tinkler Group is pleased to have agreed to settle this matter to each side's satisfaction," he said.
"We look forward to fulfilling the agreement over the next month."
Mr Tinkler was once named as Australia's youngest billionaire at the age of 35 until his empire began to fade under heavy debts and weakening coal markets.
Mr Tinkler's investment vehicle Aston Resources remains the biggest shareholder in ASX-listed Whitehaven Coal, with a 21 per cent stake worth about $480 million.
The value of that stake has more than halved over the past 12 months, on the back of sliding coal prices and uncertainty about the future of Mr Tinkler's stake.