TGIF 21 August 2026 - Foreign company unsuccessful in seeking to terminate its own winding up

This week’s TGIF considers Gray (liquidator) v Marshall Investments GCP Pty Ltd, in the matter of Mawson Infrastructure Group Inc (in liq) (No 2) [2026] FCA 1066, where the Federal Court of Australia refused a foreign company’s attempt to terminate its own winding up. 

Key takeaways

• Upon the appointment of a liquidator to a registered foreign company in Australia, the powers and functions of the company's directors are suspended by operation of the Corporations Act 2001 (Cth) (Corporations Act) even where those directors continue to act on the company's behalf in its country of incorporation.

• A registered foreign company in liquidation in Australia cannot bring an application to terminate its own winding up. The company is not, however, without recourse entirely. It may ask for a court’s permission to appear as an interested party and lend support to the liquidator’s own application to bring the winding up to an end. 

• For cross-border insolvencies, this decision demonstrates the courts’ willingness to actively engage in real-time judicial cooperation with foreign courts, including coordinated joint case management hearings. 

Background

In Gray (liquidator) v Marshall Investments GCP Pty Ltd (No 2) [2026] FCA 1066, the Federal Court dismissed an application by a registered foreign company in liquidation to terminate its own winding up.

Mawson Infrastructure Group Inc (Mawson) is a company incorporated in the United States and registered in Australia as a registered foreign company under Part 5B.2 of the Corporations Act. On 11 February 2025, the Court appointed Mr Gray as liquidator of Mawson.

On 30 June 2026, the Federal Court declined to terminate the Australian winding up despite the US Bankruptcy Court dismissing a Chapter 11 petition filed against Mawson by Australian creditors. The Court held the US Bankruptcy Court's orders did not displace the Australian liquidation. The Court found the liquidator was justified in continuing to discharge his duties under the Corporations Act. 

Mawson seeks to terminate its own winding up

Mawson applied to the Court seeking to terminate its own winding up in Australia. In support of that application, Mawson advanced the following arguments:

• As a registered foreign company incorporated outside Australia, Mawson was not a ‘company’ for the purposes of the relevant provisions of the Corporations Act.

• Accordingly, the powers and functions of Mawson's US based directors were not suspended in Australia upon the appointment of the liquidator under the Corporations Act.

• Mawson could therefore bring an application in Australia to terminate its own winding up without the need to obtain permission from the Court.

• Alternatively, Mawson had sufficient standing under the Corporations Act to bring the termination application itself.

Court refuses Mawson’s application 

Justice Downes rejected each of Mawson's arguments determining that:

• a registered foreign company wound up under Part 5.7 is a ‘company’ for the purposes of the relevant provisions of the Corporations Act;

• the Insolvency Practice Schedule treats a company as being under external administration once a liquidator has been appointed;

• the powers and functions of Mawson's directors were accordingly suspended in Australia upon the liquidator's appointment, by operation of section 198G of the Corporations Act; and

• as Mawson had been granted leave to appear as an interested party, it was entitled to be heard on any application. Mawson could also assist the liquidator's application to terminate the winding up. For example, Mawson could adduce evidence in support of the liquidator’s termination application. However, the Court noted proposed measures of cooperation between the US Bankruptcy Court and the Federal Court of Australia, including a joint case management hearing which could overtake any future termination application.

Comment

For a liquidator appointed to a registered foreign corporation operating in Australia, the decision clarifies that the liquidator's appointment triggers the suspension of the powers and functions of the company's directors. This is so even where the directors continue to act on the company's behalf in its country of incorporation.

The decision confirms the liquidator retains carriage of any application to terminate the winding up of the company in Australia. Directors of a registered foreign company cannot circumvent this framework by purporting to bring an application to terminate the winding up on the company's behalf. This reinforces the liquidator's role in determining the conduct and strategic direction of the Australian administration.

For liquidators and creditors involved in cross border insolvencies, the decision signals a willingness on the part of both the US Bankruptcy Court and the Federal Court of Australia to engage in active judicial cooperation. 

Such cooperation may facilitate information sharing, streamline asset realisation and reduce the cost and inefficiency of duplicative proceedings. 

However, it may also mean that developments in foreign jurisdictions have a bearing on the conduct of Australian liquidations. Liquidators and creditors should take these factors into account when planning recovery strategies and managing stakeholder expectations.