In the recent case Patel v Pleash [2025] FCA 77, the Federal Court sent a clear message to insolvency practitioners:
Don’t take a creditor’s word at face value — verify their security interest before acting.
In this matter, a lender called iLend Capital appointed an administrator (Pleash) over Jubilee Infrastructure under section 436C of the Corporations Act 2001. That section only allows secured creditors to appoint an administrator if their security is genuinely enforceable.
The problem? iLend didn’t actually hold a valid security interest.
Because the administrator relied on the lender’s representation without checking the paperwork, the Court ruled that the appointment was invalid and unlawful.
What Went Wrong
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The lender used administration as a collection tactic, not a legitimate insolvency step.
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The administrator failed to independently confirm that the security met the legal requirements of section 436C.
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The move harmed the company, freezing funds and stalling its property project.
Why This Matters to Directors
For business owners, this case shows that not every “secured” creditor actually has a valid claim.
If a creditor rushes in with a charge, caveat, or claim of security, there may be room to challenge it and to protect your position before assets or control are lost.
The apickle Lens
At apickle, we see this play out often.
Creditors move fast, registering charges, lodging caveats, or claiming personal guarantees, but sometimes their security is weak or invalid.
Our job is to cut through that chaos, check the details, and use those weaknesses to negotiate fair outcomes for directors.
What You Should Do Now
If you’re under creditor pressure, don’t assume their paperwork is solid.
Ask to see the original agreements, registration dates, and enforceability details.
If something doesn’t add up, it might be your best opportunity to push back.
At apickle, we negotiate with creditors, consolidate the chaos.
