Tech Startup's DOCA Survives Challenge From US Investors Claiming Millions

The Federal Court has dismissed a bid by two US companies claiming to be creditors to set aside the deed of company arrangement of Soar.Earth Limited ("Soar"), an Australian aerial-imaging and digital-mapping platform, rejecting arguments that the deed was an abuse of process, based on misleading disclosure, and unfairly favoured related parties.

Soar operates a digital-mapping platform, Soaratlas.com, and remains at an early commercialisation stage. It entered voluntary administration in April 2026 under administrators from Hall Chadwick, before creditors approved a DOCA the following month.

Why it matters: Courts have terminated DOCAs before on the basis that they exist mainly to strip out one unwanted creditor's claim. Here, the administrators presented detailed and effectively unchallenged evidence showing they had genuinely compared the DOCA with the available liquidation scenarios, which was enough to survive the challenge, even though the practical effect was releasing the applicants' claims while leaving related-party debts standing.

The backstory. The dispute traces to a 2023 advisory agreement between Soar and Mr Mahaffie, the common director of both plaintiff companies. Issuer Solutions is seeking the return of roughly USD500,000 it invested in Soar's shares, alleging fraud; its claim was admitted for voting purposes at around AUD712,459. Stelamar separately claims close to USD8.9 million in damages, though Soar disputes it, and its proof of debt was admitted for just AUD1 because the value couldn't be readily verified. Soar has its own counterclaim against the Mahaffie parties for about USD3.1 million. All of it is still working through US arbitration.

The administrators told creditors the arbitration's cost was driving Soar toward insolvency. Their DOCA established a $500,000 deed fund, financed by Soar's wholly owned subsidiary, for administration costs and distributions to participating creditors. The non-participating creditors included Soar's directors and related parties, Soar Australia, continuing employees and Botanix Pharmaceuticals, which held a $400,000 convertible-note claim. They were excluded from distributions, but their claims were not compromised and would continue to be owed after the DOCA terminated.

At the creditors' vote in May, the two US companies pushed for an adjournment to wait on an intellectual property valuation that hadn't come through yet. The administrators had approached five other valuers before engaging one, and didn't receive the valuation until after the meeting had already happened. The adjournment motion failed, voted down by related parties and a group of smaller unrelated creditors. The DOCA vote split the same way and passed. It was executed 10 June 2026. The plaintiffs sued the next day to set it aside and wind up the company instead.

The arguments, and why they failed. The plaintiffs argued the DOCA existed mainly to strip out their claims specifically. Justice Jackman rejected that, pointing to the administrators' evidence that they had genuinely weighed the DOCA against a winding up, factoring in creditor returns, the risk of a forced sale, and staff retention.

They also argued the missing IP valuation and the absence of a scenario where a future liquidator dropped the arbitration made the disclosure misleading. The Court found the administrators simply didn't have a valuation yet despite real efforts to get one, and had no reasonable basis to treat abandoning the arbitration as a probable outcome, so neither omission counted against them.

Finally, they argued the DOCA unfairly favoured related-party creditors, whose debts survived untouched. The Court accepted the difference in treatment but called it an ordinary commercial trade-off, not unfair discrimination, noting eleven unrelated creditors, five of which were not priority creditors, also voted for the deed.

Outcome. The application was dismissed on 4 September 2026. Costs weren't decided on the spot: Justice Jackman set a timetable for submissions running through late October, though he flagged a preliminary view favouring an order against the plaintiffs.

Ironbridge Legal acted for Stelamar and Issuer Solutions. Solomon Brothers Lawyers acted for the administrators.

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