A 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 […]
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