Seafarms Group (ASX:SFG) said it will be entitled to receive a substantial portion of any funds distributed by the liquidators of Project Sea Dragon, after a Supreme Court of Queensland ruling on Friday, according to a same-dau filing with the ASX.

The court ruled against the application for leave by the liquidators to have themselves appointed administrators.

It ordered that the deed fund, as described in the deed of company arrangement, held in court is to be paid to the liquidators. After the costs of the liquidation are paid, the balance of the fund will form part of the funds which will be distributed to the creditors of Project Sea Dragon as a dividend in the liquidation.

It also ordered that the repayment obligations on the deed administrators and their right to an indemnity from company assets as per the Funding Agreement and Corporations Law remain on foot.

The firm will take steps to recover that amount from the deed administrators.