Woodhouse (Liquidator), in the matter of Forex Capital Trading Pty Ltd (in liq) (No 2) [2026] FCA 627

This decision arose in the administration of the liquidation of Forex Capital Trading Pty Ltd. The Federal Court record says the company had offered derivative products to customers and that there were about 8,600 former customers with separate claims against it. That scale matters. A liquidation with a handful of creditors can usually follow the standard proof-of-debt and dividend process without much difficulty. A liquidation with thousands of former customer claims is different. The process itself becomes a major commercial and legal problem.

The liquidators had already obtained earlier orders for an optional abridged claim assessment and adjudication process. By May 2026, assets had been realised and a dividend was going to be declared. That meant the liquidation had moved from investigation and claim triage into the distribution stage. The liquidators needed a practical, court-approved way to finish adjudicating claims, notify creditors, calculate entitlements, and pay money out.

The annexed notices show the range of creditor positions the liquidators were managing. Some former customers had previously accepted a discounted adjudication process and already had admitted discounted claims. Some had rejected that earlier discount. Some had not participated at all. Some had claims affected by prior settlement deeds. Others had not suffered a loss in the earlier period used for the first process, but might still have a claim if a longer period was used.

To deal with that, the liquidators proposed an Extended Period running from 1 January 2016 to 27 June 2021. For some groups, they proposed to admit a claim based on net loss over that Extended Period with a 15% discount, so the creditor could avoid having to submit supporting evidence. For others, the creditor could reject that approach and lodge a proof of debt with evidence instead. The court was therefore being asked to supervise a mass-claims distribution framework, not to decide a simple two-party dispute.

The application was made under s 90-15 of the Insolvency Practice Schedule (Corporations). The liquidators asked the court to modify the operation of the usual regulations so the claims and dividend process could be completed more efficiently. The orders made show exactly what the court approved.

First, the court extended the timeframe for notice of an intention to declare a dividend. Secondly, it extended the timeframe for the liquidators to deal with formal proofs of debt and claims to 21 days. Thirdly, for the partial rejection of Discounted Net Loss Claims where a creditor agreed to have the claim admitted on the basis of net loss during the Extended Period at 85% of face value, the liquidators were relieved from complying with certain regulatory steps.

The court also made two important directions about money and calculation methodology. It held that the liquidators were justified and acting properly in treating each amount of less than $20 held in the client funds account for a particular former customer as an asset of the company to be distributed among creditors in accordance with the orders. It also held that, despite s 554C of the Corporations Act, the liquidators were justified and acting properly in using the AUD:USD exchange rate published by the Reserve Bank of Australia on each day as the basis for converting USD-denominated amounts when calculating the value of net loss.

For a business reader, the short version is that the court approved a practical package: extended timeframes, digital notices, digital claim forms, streamlined treatment of some discounted claims, electronic payments, a rule for tiny balances, and a rule for USD conversion.

The annexed notices are useful because they show how the approved process worked in practice for different creditor groups. They also show why responding to a liquidator's communication can matter so much.

Admitted Discount Creditors were people who had previously participated in the expedited adjudication process, accepted a 15% discount on net loss for the earlier Relevant Period, and already had an admitted discounted claim. They were given a choice. They could accept an Extended Claim based on net loss over the Extended Period with a 15% discount, or reject that and submit a proof of debt instead. If they did not respond by the stated date, they would be deemed to have accepted Option One.

Non-Electing Creditors were people who had previously rejected the discounted adjudication. They were again given a choice between accepting an Extended Claim or lodging a proof of debt. But their non-response position was different. If they did not respond by the deadline, they would not have an admitted claim and would not be entitled to participate in any distribution. That is a direct example of how silence can produce a materially different legal outcome depending on the creditor category.

Potential Former Customer Creditors were people who, based on the company's books and records, may have traded during the earlier Relevant Period but had not yet registered a claim or participated in the 2022 expedited process. They too could accept an Extended Claim or lodge a proof of debt. If they did not respond, they would not have an admitted claim and would not be entitled to participate in a distribution.

Prior Settlement Creditors were people whose earlier claims had not been admitted because the company's books and records indicated they had entered into a settlement deed before the winding up began on 27 June 2021. They were not offered the same simple accept-or-reject pathway. Instead, they could submit a proof of debt with evidence, including information about why they said the settlement was not legally binding or why they still had a claim. If they did not do so by the deadline, they would be excluded from participating in any distribution.

Non-Relevant Period Creditors were people whose earlier claims had not been admitted because they had not suffered a loss during the earlier Relevant Period, but who might still have a claim if the Extended Period was used. They could accept an Extended Claim or submit a proof of debt. If they did not respond, they would be deemed to have accepted Option One.

The legal issue was whether it was appropriate for the court to exercise its power under s 90-15 of the Insolvency Practice Schedule (Corporations) to modify the operation of the regulations in order to enhance the efficient process for finalising proofs of debt, declaring a dividend and distributing payment to former customers. The catchwords and orders show that Banks-Smith J answered that question yes and made the orders sought.

The decision approved the liquidators' proposed departures from the ordinary process because this was a mass-claims liquidation with unusual administrative complexity. The court did not say that liquidators can generally ignore the regulations. Instead, it used the supervisory power to authorise a specific process for this company and this creditor population.

Two aspects of the orders are especially important. First, the court expressly held that the liquidators were justified and acting properly in treating each amount of less than $20 held in the client funds account for a particular former customer as an asset of the company to be distributed among creditors in accordance with the orders. Secondly, notwithstanding the operation of s 554C of the Corporations Act, the court held that the liquidators were justified and acting properly in using the Reserve Bank of Australia's daily AUD:USD exchange rate as the basis for converting USD-denominated amounts when calculating creditors' claims, including former customers' claims, for the purpose of calculating net loss.

Those rulings matter because they gave the liquidators practical certainty on two recurring administration issues: what to do with very small balances that are costly to administer individually, and how to convert foreign currency amounts in a way that is workable across a large body of claims.

If your business holds customer funds, runs account-based products, or records transactions across currencies, this case is a reminder that operational data can become the backbone of an insolvency claims process. The liquidators relied on the company's books and records to identify former customers, classify them into categories, send notices to email addresses on file, and calculate proposed net losses. If those records had been incomplete or unreliable, the process would likely have been slower, more expensive and more contested.

The case also shows the legal importance of settlement records. One creditor category was made up of people whose earlier claims were not admitted because the company's records indicated they had entered into settlement deeds before the winding up. In practice, that means a business should be able to retrieve settlement deeds, releases, account identifiers and related communications quickly and accurately. In an insolvency, those records may determine whether a claim exists at all.

For creditors, the lesson is straightforward. Do not treat a liquidator's email as mere administration. In this case, the approved notices carried real consequences. Some recipients were deemed to accept a proposed option if they did nothing. Others would lose the ability to participate in a distribution if they failed to respond by the deadline. A business that ignores those communications can lose money simply by missing the process.

There is also a broader governance point. Courts may support digital administration methods such as email notices, online forms and electronic payments where they are sensible and proportionate. But those methods were valid here because the court approved them. Businesses should not assume that an informal process is automatically enough in every insolvency context. The authority came from specific orders made for a specific liquidation.

For a quick read, the main modifications approved by the court were these: longer time for notice of intention to declare a dividend, 21 days for the liquidators to deal with formal proofs of debt and claims, deemed compliance through email notices and online forms, no further action required if there was no response to notices sent under the orders, electronic payment of dividends, treatment of sub-$20 client-fund amounts as company assets for distribution, and use of the Reserve Bank of Australia's daily AUD:USD exchange rate for USD conversion when calculating net loss.

The practical message is not that every liquidation can be run this way. The message is that where a liquidation involves thousands of customer claims and the ordinary process would be unwieldy, the court may approve a customised framework that still aims to be fair and workable.

If you are a director or founder, the case is also a reminder that record-keeping is not just an accounting function. It is part of legal risk management. If your business later enters external administration, the quality of your records may affect who can be identified, what claims can be calculated, whether settlements can be verified, and how quickly a liquidator can distribute funds.

If you are a creditor, the safest approach is to read every notice carefully, identify the deadline, and work out whether you are being offered a streamlined claim option or being asked to prove your claim formally. The difference can affect both timing and amount of recovery.

This page is based on the published Federal Court reasons and orders in Woodhouse (Liquidator), in the matter of Forex Capital Trading Pty Ltd (in liq) (No 2) [2026] FCA 627. The published material clearly supports the existence of the liquidation, the scale of the former customer claims, the application under s 90-15, the categories of notices annexed to the orders, and the orders that were made.

The decision provides a solid basis for explaining the approved process and its practical implications. It should still be read as a case-specific supervisory decision in a large liquidation rather than a complete guide to every proof-of-debt or dividend issue that may arise in other administrations.