From www.bartier.com.au: A recent NSW Court of Appeal decision clarified that a letter of comfort issued by Invesus Group Ltd did not create a binding obligation to cover the debts of its subsidiary, Forex Capital Trading Pty Ltd, following its liquidation.

The court determined that the phrase “any debts incurred” referred to debts established under legal principles, rather than claims admitted by a liquidator.

This case underscores the importance of carefully drafting letters of comfort and considering formal guarantees for enforceable protections.