This case is a good example of why trust structures need boring paperwork. A company acted as trustee of a family-related trust that held property. When the company went into liquidation, the liquidator needed to know what power he had over the trust assets. At the same time, a beneficiary said the trust property was tied up with family law property proceedings and should not be dealt with separately.
The Court allowed Ms Collazo to intervene and ordered the liquidator to take no further step in respect of the trust assets, except what was required to preserve them, pending further order. That was a practical holding pattern. It recognised that the trust assets, liabilities, trustee position and family law proceeding were connected enough that the liquidator should not simply press ahead with dealing with the assets.
For small businesses, the lesson is direct. Many businesses use corporate trustees for family trusts, unit trusts or trading trusts. If the company trustee becomes insolvent, the business needs the trust deed, trustee appointment history, asset register, beneficiary records and indemnity position ready. Without that, legal fees can chew up value while everyone fights about who can deal with the assets.