Australia: The Arrium Series (#7) - Novel assessments of loss for negligence, misleading conduct and insolvent trading

In brief

The Arrium Series

Welcome to issue #7 of our Arrium Series, where senior members of the Baker McKenzie team involved in the successful defence of proceedings against the former CFO, former Treasurer and other former employees of the Arrium Group, consider key issues arising in those and related insolvent trading proceedings and from the judgment handed down on 17 August 2021.1

A summary of the relevant background to the Arrium proceedings, some key terms and the key issues to be considered in this Arrium Series can be found in issue #1 here, issue #2 (which considers solvency in the context of large debts due in the relatively distant future) can be found here, issue #3 (which considers when and how duties of care may be owed to lenders) can be found here, issue #4 (when may company officers and employees be personally responsible for representations) can be found here, issue #5 (which considers the interpretation and application of Material Adverse Change clauses) can be found here and issue #6 (which considers issues in reliance and causation) can be found here.


Contents

Today's issue - Novel assessments of loss for negligence, misleading conduct and insolvent trading

The methods of assessment of damages contended for by the plaintiffs in each of the two Lender Proceedings, and also the (settled) insolvent trading proceedings, were novel and, in the case of the Lender Proceedings, also extraordinarily complex as the plaintiffs in those proceedings each (unsuccessfully) grappled with the task of proving the likelihood, and likely outcomes, of a counterfactual involving an earlier hypothetical administration. 

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1 Anchorage Capital Master Offshore Ltd v Sparkes (No 3); Bank of Communications Co Ltd v Sparkes (No 2) [2021] NSWSC 1025

Related alerts from the Arrium Series

Australia: The Arrium proceedings - something important for everyone

Australia: The Arrium Series (#2) - Determining solvency where current debts are being paid but large debts are due in the relatively distant future

Australia: The Arrium Series (#3) - Do you owe a lender a duty of care?

Australia: The Arrium Series (#4) - When may company officers and employees be personally responsible for representations?

Australia: The Arrium Series (#5) – Interpretation and application of Material Adverse Change clauses

Australia: The Arrium Series (#6) - Lender reliance and loss causation

Australia: The Arrium Series (#8) - Secondary debt trading - Assignments of debts and rights of recovery


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