You want to buy assets while serving on the creditor committee
Disclose potential personal advantage from committee member asset purchase and obtain process advice before proceeding.
Corporate Recovery Partners
01 / 06
The opportunity intersects with the committee role
A hypothetical supplier joins a committee of inspection after a builder enters liquidation. Later, the supplier becomes interested in buying equipment from the liquidation. Before making an informal deal or using committee information to negotiate, disclose the proposed interest to the liquidator and obtain advice about the applicable restrictions and process. Participation brings responsibilities as well as information.
Identify the asset, proposed buyer and any connection between the buyer and the committee representative. Include indirect involvement rather than reporting only a purchase in your own name. Keep the explanation factual. Do not assume that using a related company makes the transaction unrelated to the committee member or removes the need to raise it.
ASIC's liquidation guide explains that committee members must not derive a direct or indirect profit or advantage from the liquidation unless creditors resolve to allow it or a court grants leave. Ask how that rule applies to the proposed transaction. Disclosure alone should not be treated as permission to proceed or proof that every required step has been completed.
In the hypothetical example, give the liquidator the proposal before seeking to influence discussion about the equipment. Obtain advice on participation, information handling and any approval requirements. Do not write your own exemption into the meeting notes or assume another member's informal agreement settles the issue. Preserve the directions and decisions actually given.
Keep the purchase separate from the creditor claim
Maintain the existing debt claim through its proper process. Avoid offering to exchange committee support for a favourable purchase or priority on the unpaid account. If a transaction is permitted, ask what documentation and ordinary sale requirements apply. The commercial merits of the purchase do not themselves establish that it is permissible for the member.
Seek independent advice if your obligations or interests are unclear and follow the verified process before signing or paying. CRP can help organise the relevant commercial records. The useful first step is early disclosure and assessment, so a proposed asset purchase does not undermine the proper exercise of the committee role.
