https://www.claytonutz.com/knowledg...insurance-upheld-in-insolvency-exclusion-case
https://insurance.moray.com.au/publication/insurer-goes-bust-on-insolvency-exclusion/
https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2018/2018fca2055
https://mccabecurwood.com.au/directors-insolvent-company-evade-insolvency-exclusion/
The way I see it, goes like this.
The company was placed into the hands of an Administrator, and declared insolvent.
The Administrators investigated the company accounts, and then decided to commence proceedings against 4 former directors of the company.
Those directors then said that their D&O Liability Insurance taken out by Kaboko with AIC Insurance, should cover the costs and claims and results or payouts (if the judgement goes against them) of the proceedings brought against them by the Administrators.
The AIC Insurance company then claimed that the D&O Insurance police was invalid and would not cover the directors, because the company was insolvent.
This claim was contested by the Kaboko directors.
The court ruled in favour of the Kaboko directors, and said the D&O Insurance policy should cover the directors, because the insolvency did not cause the company going into Administration, it was the demand by Noble Group to payback the loan that caused the company to go into Administration.
Therefore, currently, the AIC Insurance company has to pay the Administrators the fees and costs and penalties claimed by them against the 4 company directors (which effectively means that the 4 company directors do not have to pay it, their insurance policy does).
I'm presuming here, that any damages and claims brought by the Administrators will go to pay the Administration fees and possibly to the Creditors (who may be Noble Group). But what about the former shareholders, do they have a claim?
However, the AIC Insurance company has appealed the judgement, and it is going to the Federal Court.
Had the Administrators not commenced proceedings against the 4 directors, then this whole process would never have commenced. The Administrators may have been encouraged by the Creditors to commence these proceedings, but I'm not sure of that.
It still begs the question, which should now be asked of the Administrators by former Kaboko shareholders - if the AIC Insurance company has to cough up USD$5 million dollars or more (a figure that was mentioned in one of the above linked articles), will the former shareholders be entitled to claim any of that money?
And in the meantime, what has happened to the Manganese deposit, who actually currently owns it?
I will pose both of these questions to the Administrators, and if I get any response then I will post it here.
Gw
