Court backs $4M funding deal to keep Grays.com trading

The Federal Court has granted relief to the administrators of Grays.com Pty Ltd, the online industrial and automotive auctions platform, limiting their personal liability for debts incurred under a $4 million funding agreement and authorising the use of electronic communications with creditors. The orders, made under s 447A of the Corporations Act 2001 (Cth), allow administrators Jason Preston and Damien Pasfield of McGrathNicol to continue trading the business while they pursue a sale or recapitalisation process.

The administrators sought protection from personal liability under s 443A, as the group’s liabilities exceed $35 million and its cash reserves were projected to run out by late October 2025. The funding agreement, backed by Comserv 2291 Pty Ltd—Grays’ sole shareholder, secured creditor, and an associated entity of Slattery Auctions Australia Pty Ltd (which acquired Grays shortly before it was placed into voluntary administration on 3 October 2025)—provides working capital to maintain operations and preserve value while the administrators market the business. Justice Owens found the relief necessary and consistent with the objectives of Pt 5.3A, ensuring the administrators could make commercial decisions in the creditors’ best interests without fear of personal exposure.

The Court accepted that without funding, Grays would have been forced into an immediate shutdown, leading to job losses for its 300 employees and diminished recoveries. Creditors, including Australia Post, Charter Hall, iCare, and several landlords, were notified of the application at the first creditors’ meeting, and the secured creditor’s support was deemed “powerful” in favour of the orders. Owens J also approved streamlined electronic notice procedures to conserve costs and facilitate timely communication, describing such orders as “now commonplace.”

Read the decision here.