Balancing the right of bankrupts and creditors: characterising after-acquired property of bankrupts
Mr Badcock (the Respondent) was an undischarged bankrupt, and Mr Ambrose (the Applicant) was the trustee of his bankruptcy. The key issue for determination was the definition of property under the Bankruptcy Act, and whether the moving of monies into an interesting-bearing account by the Respondent was sufficient to change the character of income to […]
ReadmoreFederal Court of Australia sets out the principles relevant for an application by a liquidator for approval to enter into a costs agreement and a funding agreement under s 477(2B) of the Corporations Act (Cth)
Litigation funding can play an important role in allowing liquidators to recover debts on behalf of liquidated companies, where there may be a real prospect of success in recovery proceedings but where obstacles such as funding or security for costs may present themselves. Pursuant to section 477(2B) of the Corporations Act 2001 (Cth) (the Act), […]
ReadmoreAn administrator’s right to remuneration out of trust property
In Australian Securities and Investments Commission v Marco (no 9) [2021] FCA 1306 the Administrators brought an interlocutory application seeking remuneration orders pursuant to section 60-10(1)(c) of the Insolvency Practice Schedule (IPSC) for the administration of the second defendant. The application was opposed by the Liquidators of the second defendant. Justice McKerracher ultimately held that […]
Readmore‘Sequencing problem’ – the Court makes orders varying the operation of the Corporations Act to allow a voluntary administrator to transfer shares without owner consent
In the Supreme Court of New South Wales case of In the matter of Habibi Waverton (in liquidation) (administrator appointed),[1] the Court considered whether or not to permit a voluntary administrator to transfer shares in order to implement a Deed of Company Arrangement (DOCA) pursuant to section 444GA of the Corporations Act 2001 (Cth) (the Act). […]
ReadmoreGroup costs orders – The way of the future?
The Victorian Supreme Court’s decision in Fox v Westpac Banking Corporation; Crawford v Australia and New Zealand Banking Group Limited[1] was the first determination of an application seeking a group costs order in Australia. Whilst the Plaintiffs’ applications were ultimately unsuccessful, the Court decided to adjourn the applications (rather than dismiss them altogether) in order […]
ReadmoreIs a Mortgagee’s 60% default interest rate just a collateral advantage? Or is it unfair and unconscionable?
Mortgagees should not only consider the content of a mortgage term, but the effect of its operation. If the effect of the mortgage terms could be seen to operate unfairly or unconscionably to a mortgagor, as discussed in the recent decision of the New South Wales Supreme Court in First Mortgage Capital Pty Ltd v […]
ReadmoreThe Director Identification Number (DIN) regime is here – Implications for directors
The Commonwealth Government has introduced the Director Identification Number (DIN) regime through reforms to Part 9.1A of the Corporations Act. From 1 November 2021, DINs became mandatory for all company directors. DINs are expected to assist regulators with their regulatory functions, such as combatting illegal phoenixing activities. DINs of course mean more admin for company […]
ReadmoreGazing into the crystal ball – when assessing whether a company is insolvent, how far into the future should the Court look?
In Anchorage Capital Master Offshore Ltd v Sparkes (No 3); Bank of Communications Co Ltd v Sparkes (No 2),[1] the NSW Supreme Court handed down judgment in two proceedings (which were heard together) arising from the failure of Arrium and its broader corporate group.[2] Of particular interest to insolvency practitioners, the Court was asked to […]
ReadmoreLiquidators beware: pitfalls in admitting proofs of debt
The Federal Court’s decision in Tuscan Capital Partners Pty Ltd v Trading Australia Pty Ltd (in liq)[1] concerns an interlocutory application made by a creditor to review the liquidator’s decision to admit a proof of debt. Background The proof of debt was lodged by Fishbank Development Corporation Pty Ltd (FDC) in the amount of $56,289.43, […]
ReadmoreAppointed too late – company fails to avoid liquidation
Section 440A(2) of the Corporations Act 2001 (Cth) (the Act) requires the Court to adjourn a winding up application if it is satisfied that it would be in the best interest of creditors for the company to continue under administration rather than be wound up. In the matter of Integrated Green Energy Solutions Ltd (administrators […]
ReadmoreWho can use documents obtained in public examinations and when?
In LCM Operations Pty Ltd, in the matter of 316 Group Pty Ltd (In Liquidation) [2021] FCA 324, the Federal Court considered whether a third party who has been assigned a company’s claim by a liquidator breached the Harman undertaking with respect to documents obtained through public examinations. What happened? 316 Group Pty Ltd (316) […]
ReadmoreTo terminate or not to terminate? Proving solvency following the making of a winding up order
Hughes, in the matter of Substar Holdings Pty Ltd (in liquidation) (No. 2)[1] (Substar No. 2) considers the Court’s discretionary power to terminate the winding up of a company pursuant to s 482(1) of the Corporations Act 2001. Substar No. 2 follows the decision of Hughes, in the matter of Substar Holdings Pty Ltd (in […]
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