Federal Court Dismisses Liquidators' $27M Claim Against Startup Financiers

Ruling finds officers had no improper purpose in booking finance payments as revenue The Federal Court has dismissed liquidators' $27 million claim against a video startup's former financiers over agreements allegedly used by its officers to inflate its parent's share price. In Big Review TV Ltd (in liq) v FC Securities Pty Ltd (No 2) [2026] FCA 1392, handed down 22 September 2026, the court found that the liquidators had failed to establish their case "at multiple levels." It ordered them to pay the respondents' costs. Big Review TV Ltd (BRTV) ran a video review platform and was the sole operating subsidiary of ASX-listed BIG UN Ltd (BIG). Its financiers, which traded as First Class Capital, funded the production of promotional videos for businesses, many of which had no obligation to pay unless satisfied with their video. BRTV recorded the funding as revenue. BIG later determined that its reported revenue was materially overstated, and both companies went into liquidation in 2018. BRTV and its liquidators alleged that four BRTV officers approved "extravagantly uncommercial" agreements with the financiers so that BRTV could book debt as revenue and lift BIG's share price for their own benefit. The officers were not parties to the proceeding. The claims relied on ss. 181 and 182 of the Corporations Act 2001 (Cth) and general law fiduciary duties. The liquidators alleged that the financiers and one of their directors were knowingly concerned. They sought $27.2 million in compensation or, alternatively, up to $72.7 million through an account of profits or knowing receipt. The court rejected the allegation of improper purpose. It found that the officers acted on accounting advice that endorsed treating the payments as revenue and did not intend to present a false picture of BRTV's revenue. The court said that the liquidators' case involved a "false dichotomy" between revenue recognition and BRTV's commercial interests. It noted that BRTV was a startup in a growth phase and that capital was easier to raise when revenue was growing. It also rejected the claim that the main financing agreement was uncommercial. It found that the cashflow analysis by the liquidators' expert ignored the growth in value of BRTV's video library and the potential future revenue of the business. The expert accepted that, on the same figures, a bank overdraft would also be uncommercial. The court said that there was no proper basis to second-guess the officers' business decisions. A separate case over a share subscription agreement also failed. Although it said that it did not need to decide the point, the court found that the financiers neither knew nor considered that the agreements were contrary to BRTV's interests. It noted that, as a significant provider of finance, they had an interest in BRTV's success. The court also found that no loss had been established. It said that the largest part of the compensation claim, about $25.5 million in financing and cancellation fees, in practical terms amounted to a claim for "a cost-free loan." It noted that BRTV sold intellectual property, including its video library, for $42 million during administration. The liquidators had not addressed how the financing agreement contributed to that value. Subscribe to our FREE newsletter service and we’ll keep you up-to-date with the latest breaking news, cutting edge opinion, and expert analysis affecting both your business and the industry as whole. Please enter your email address below and click on Sign Up for daily newsletters from Australasian Lawyer.