Onerous Contracts can sometimes become Onerous for Liquidators

Masi Zaki and Kate Spratt of Bird & Bird discuss a New South Wales Court of Appeal decision confirming that liquidators cannot disclaim contracts merely because doing so would increase returns to creditors, with the Court refusing to allow the disclaimer of a perpetual mining royalty agreement that depressed the sale price of a coal mine but imposed no continuing onerous obligations on the insolvent companies, while emphasizing the importance of protecting counterparties' contractual rights and commercial certainty.

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