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 […]
ReadmoreIs there a need to revamp the corporate insolvency system?
Yes is the answer! On 12 July 2023, the Parliamentary Joint Committee on Corporations and Financial Services published its report regarding corporate insolvency in Australia. Objective of the inquiry The committee’s inquiry assessed how effective the current corporate insolvency regime is at providing benefits to, and protecting, stakeholders as well as the Australian economy. It […]
ReadmorePooling order for the win!
On 2 March 2023 the Supreme Court of Victoria published its reasons in the matter of Atlas Gaming Holdings Pty Ltd [2023] VSC 91 (the Atlas case) in which Gadens acted on behalf of the Liquidator of four companies seeking a pooling order pursuant to section 579E of the Corporations Act 2001 (Cth) (the Act). […]
ReadmoreInsolvency Reforms Pass Parliament
Changes to Australia’s insolvency framework proposed by the Corporations Amendment (Corporate Insolvency Reforms) Bill 2020 (Cth) have been passed by Parliament and will be available for eligible small businesses from 1 January 2021. Our recent article addressing the proposed Bill can be viewed here. The legislation introduces a new, simplified debt restructuring process accessible by […]
ReadmoreSmall Business Insolvency Reforms – What this means for SME businesses as COVID restrictions ease and into the future
Following Treasury’s announcement on 24 September 2020 that it will introduce a suite of reforms to Australia’s insolvency framework, the Corporations Amendment (Corporate Insolvency Reforms) Bill 2020 (Cth) (Draft Bill) was released for public consultation between 7 and 12 October 2020, providing much needed clarity as to the practical effect of the insolvency reforms, which […]
ReadmoreCOVID-19 | Emergency Amendments to Insolvency Laws: What’s next?
In March, we reported that, as part of a suite of legislative and economic responses to COVID-19 the Commonwealth Government had announced a range of temporary amendments to certain insolvency laws. The amendments were aimed at temporarily amending insolvency laws, affecting in turn corporate governance, and directors’ duties. The purpose of the amendments was to […]
ReadmoreDoes property held by a bankrupt on trust for another vest in the bankruptcy trustee?
On 13 December 2019, in Franz Boensch as Trustee of the Boensch Trust v Scott Darren Pascoe[1] the High Court unanimously dismissed an appeal from a judgment of the Full Court of the Federal Court of Australia, in which the appellant sought compensation from his former trustee in bankruptcy pursuant to section 74P of the Real Property Act […]
ReadmoreCan a “Gentleman’s Agreement” not to enforce a guarantee be relied upon?
In Harburg Nominees Pty Ltd & Anor v Deen,[1] the Supreme Court of Queensland considered whether an oral “gentleman’s agreement”, that is the oral representations made, meant that the guarantees were unenforceable. The facts As at May 2015, Harburg Nominees Pty Ltd (Harburg) had, over time, advanced approximately $18.5 million to Warapar Resources Pty Ltd (Warapar) for […]
ReadmoreNSW Court of Appeal casts a shadow over voting rights
Whilst the power of a chairperson to exercise a casting vote at creditors’ meetings is a useful mechanism to resolve a deadlock in voting, it does not confer unconstrained discretion. The recent Glenfyne Appeal[1] provides valuable guidance as to the appropriate exercise of a casting vote and also serves as a reminder of the Court’s […]
ReadmoreLiquidation does not automatically remove a corporate trustee – Court directions may be required
In KSK Holdings (Australia) Pty Ltd (in liquidation) [2019] NSWSC 1463 a liquidator sought directions from the Supreme Court of New South Wales under section 90-15(1) of the Insolvency Practice Schedule (Corporations) at Schedule 2 of the Corporations Act 2001 (Cth). The liquidator sought clarity as to whether KSK Holdings (Australia) Pty Ltd (in liquidation) (KSK Holdings) remained trustee […]
Readmore“Legal Phoenix” – The burdens and benefits of professional advice
In ACN 093 117 232 Pty Ltd (In Liq) v Intelara Engineering Consultants Pty Ltd (In Liq) [2019] FCA 1489, the court considered whether a “legal phoenix” arrangement entered into after receiving professional advice was in fact a voidable transaction. The facts Intelara Pty Ltd (OldCo) operated an engineering consultancy business and after experiencing financial difficulties in […]
ReadmoreHolding company director as “officer” of subsidiary under the Corporations Act
In ASIC v King [2020] HCA 4, the High Court considered whether a director of a holding company was an “officer” of a subsidiary company for the purposes of the Corporations Act (the Act). If so, the “officer” may have been liable for breaches of duties as an “officer”. Background Mr King was the CEO and an executive director of […]
Readmore
