Changes to enforcement powers: NSW Supreme Court decision affects the ATO’s ability to recover tax debts
The NSW Supreme Court has delivered a significant decision affecting the Australian Tax Office’s (ATO) ability to recover tax debts by limiting the impact of statutory notices that garnishee a percentage of payments to a company in administration (Notice)[1]. Background Hudson Global Resources (Aust) Pty Ltd (Administrators Appointed) (Hudson) is a national recruitment agency and […]
ReadmoreManaging contract risks in times of turmoil: Leveraging force majeure and balancing insolvency risks
In the current environment of heightened geopolitical tension, including the effective closure of the Strait of Hormuz and impacts on regional oil and gas infrastructure, global supply chain disruption and volatility in energy markets, force majeure provisions are more important than ever. Australian businesses in the mining, agriculture, transport and industrial sectors who rely on […]
ReadmoreNo more broken toys: DOCA flexibility powers Toys “R” Us restructure
The Federal Court of Australia recently reaffirmed the flexibility of the Deed of Company Arrangement (DOCA) regime under the Corporations Act 2001 (Cth) (the Act).[1] It is well established that a DOCA can be used to transfer shares with approval under s 444GA of the Act. In a decision which the Federal Court described as […]
ReadmoreA matter of trust: High Court rejects trust creditor claims against third party recipients of trust property
In a 4:3 split decision, the High Court of Australia clarified that a successor trustee does not owe a fiduciary duty to a former trustee in respect of the former trustee’s entitlement to indemnification from trust assets.[1] The High Court judgment confirms that former trustees (and their trust creditors) have no independent recourse against a […]
ReadmoreWhyalla wipeout: State-sponsored upending of creditor waterfall?
Synopsis A fundamental purpose of Australia’s formal corporate insolvency laws is the provision of fair and orderly processes (administered by an independent external administrator typically appointed either by the insolvent company’s directors or its most significant secured creditor) for dealing with the company’s financial affairs. Such processes contemplate ‘pari passu’ distribution between unsecured creditors subject […]
ReadmoreCEG Direct Securities v Runtong: Full Federal Court overturns decision in a victory for secured creditors
The Full Federal Court has confirmed the validity of the longstanding practice deployed by credit providers of seeking cross-security from a borrower’s related entities (particularly in the context of the financing of commercial projects by that corporate group). In rejecting the liquidator’s characterisation of such a transaction as constituting an unreasonable director-related transaction, the Full […]
Readmore
