Court-conducted auction sales require reasoned findings on price inadequacy before refusing confirmation of the highest bid.

A company court should not refuse to confirm a public auction sale where the sale was conducted with wide publicity and inter se bidding, the highest bid exceeded the fair market value and later valuation, and no secured creditor, official liquidator or rival bidder objected that a better price could be obtained. In those circumstances, the court must have a reasonable basis for treating the bid as inadequate; an unexplained refusal without recorded reasons is contrary to settled principles governing court-conducted auctions. The refusal to confirm the sale was therefore unjustified, and confirmation in favour of the highest bidder was warranted.

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Issues: Whether the company court was justified in refusing to confirm the auction sale in favour of the highest bidder despite the bid being higher than the assessed fair market value and in the absence of recorded reasons.

Analysis: The sale committee conducted a public sale after wide newspaper publicity and inter se bidding, and the highest bid of Wearit Global Ltd. was above both the fair market value and the fresh valuation obtained later. The record showed no objection from any secured creditor, the official liquidator, or the second highest bidder that a better price could be obtained. In such circumstances, the court was required to satisfy itself that the price offered was reasonable, but the order under challenge did not disclose any reason suggesting inadequacy of price or a realistic possibility of securing a higher price. The refusal to confirm the sale was therefore unsupported by reasons and contrary to the settled principles governing court-conducted auctions.

Conclusion: The refusal to confirm the sale was unjustified; the highest bidder was entitled to confirmation of the sale.

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