The Federal Court has ordered that Mr Michael Christodoulou King be bankrupted following ASIC's presentation of a creditor's petition regarding his failure to pay a pecuniary penalty order of $300,000.
Justice Kylie Downes found the Court could make orders to declare Mr King bankrupt based on the unpaid pecuniary penalty, even though such debt is not one provable in bankruptcy.
Her Honour decided to bankrupt Mr King on the basis that:
- he owes provable debts exceeding $177 million and there was no evidence to suggest he can pay them (and is therefore insolvent);
- there is a strong public interest in protecting the public and giving fair notice in dealing with an insolvent person; and
- there was nothing inappropriate in ASIC seeking bankruptcy against an insolvent debtor, or about the fact that it had done so without having its costs orders assessed.
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