Six months after amending the deed of company administration for Sons of Gwalia the administrator Ferrier Hodgson has admitted $350 million of claims from shareholders out of a total of $577 million of claims lodged by 8038 shareholders.Parties involved in the matter say the process of assessing shareholder claims to rank beside creditors has been slow but not as slow as many commentators feared when the administration began.Sons of Gwalia is the first company administration to proceed under conditions established by a ruling of the High Court of Australia that shareholders rank beside unsecured creditors in certain circumstances.The court ruled in Sons of Gwalia v Margaretic in early 2007 that a shareholder in a failed company had the same rights as an unsecured creditor to pursue a claim against the company in cases where the shareholder had suffered loss as a result of misleading and deceptive conduct by the company.In that case the board of Sons of Gwalia, a mining company, is alleged to have failed to disclose information to the Australian Stock Exchange that would have affected the price of the stock. The company failed in August 2004.Commentators have predicted that administrators would face an impossibly complex and expensive task running company administrations where each shareholder's claim had to be put through a quasi-judicial test.Deed administrator for Sons of Gwalia, Ferrier Hodgson's Darren Weaver, said that was the prospect that faced him. "The Corporations Law sets out assessment processes that, if we had followed them, would have held us up for years."But last December creditors, including the shareholders, agreed to an amended deed of company arrangement. The new deed introduced a process that enabled the shareholder claimants to submit a statement for assessment according to an agreed formula.Weaver said: "There is no doubt it is expensive no matter how streamlined you make the process. There are ways of dealing with claims that reduce cost but the volume of claims remains an issue. "This case demonstrates that you can deal with the complexity but each case will have its own circumstances. The type of misleading conduct will have a bearing and so on."Weaver said that apart from the difficulty of assessing claims the inclusion of shareholders had an impact on the options available to the administrator in restructuring the business."If you are looking at a debt for equity swap you find yourself in a complicated situation where you are uncertain about how many creditors there are and what their equity interest in the restructured business will be."You also have problems with setting cut-off dates for making arrangements. We have had new shareholder claimants coming forward this year." The number of claimants rose from 7730 in March to 8038 at the end of June.The progress of the Sons of Gwalia administration will be watched with interest by the Australian government's Corporations and Markets Advisory Committee, which has been asked to make recommendations on whether shareholders who acquired shares as a result of misleading conduct by a company prior to its insolvency