This article was written by Nancy Wang Pricipal Solicitor at W & G Lawyers.
A company owes you money. Before you can recover it, the directors appoint voluntary administrators, and a few weeks later you are sent a long report and a notice of a creditors’ meeting. The report recommends a deal under which you may receive a few cents in the dollar and the rest of your claim is wiped out. You vote against it. The directors, their related companies and a handful of small creditors vote in favour, and the deal goes through.
Many creditors in that position ask whether a court can undo the deal. The short answer is that it can, in limited circumstances. A decision of the Federal Court of Australia handed down in September 2026 shows how hard that may be in practice. Two creditors with multi-million dollar claims asked the Court to set the deal aside on three separate grounds. All three failed, and the Court indicated that the creditors would probably be ordered to pay the administrators’ legal costs. If you are owed money by a company in administration, or you are a director thinking about proposing a deal to your creditors, the decision is worth understanding.
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