If the assets held by LLL's Mali subsidiary (such as the...

If the assets held by LLL's Mali subsidiary (such as the lithium tenements) were divested from FFX's now-insolvent Mali subsidiary, the divestment will almost certainly fall within the applicable clawback period (three years in most jurisdictions). Had the transaction occurred in Australia between Aus subsidiaries (so that Aus insolvency law applied), liquidators would likely try tk characterise the divestment as an uncommercial transaction under s 588FC of the Corps Act. If that claim was successful, the divestment would be voidable under s 588FE. It would be nearly impossible to unwind given the complexity of the transaction (ie LLL's IPO and subsequent trading) - the more likely result would be an order to pay compensation to the insolvent subsidiary equivalent to the value of the divested assets. Yes, FFX received consideration for the transaction by way of LLL shares, but those assets are ring-fenced within FFX. What did its subsidiary get in return for its lithium tenement? Answer: probably nothing, hence uncommercial transaction. The entities at greatest risk are the directors of FFX's subsidiary company that approved the divestment and LLL's Mali subsidiary. I suspect FFX's assets would only be at risk if it provided guarantees or an assurance of financial support. This is obviously mere speculation in the absence of the underlying transaction docs. In reality, the value of any creditor claims is likely to be dwarfed by LLL's first quarter revenue. The greater risk is the potential damage to the Gov relationship, which based on the tweet above looks to be intact.