COVID-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 […]
ReadmoreA warning to Liquidators: comply with your disclosure obligations or face dismissal of your unfair preference proceedings
In Clifton (Liquidator) v Kerry J Investment Pty Ltd trading as Clenergy [2020] FCAFC 5, the Full Court of the Federal Court of Australia found that: where the Liquidators failed to comply with their discovery obligations and the Court could not be satisfied regarding the existence of documents which might be deployed by innocent parties to meet […]
ReadmoreWhy courts from different jurisdictions are sitting together: Australia’s experimentation with joint hearings
Australian courts regularly cooperate with courts of different jurisdictions, both domestically and internationally. We see this, for example, when courts transfer proceedings to different jurisdictions, or stay proceedings to allow the continuation of proceedings in different jurisdictions. In recent times we have also seen the rise of a more direct form of judicial cooperation: joint […]
ReadmoreCOVID-19 | Asset Protection
The issue of asset protection often doesn’t materialise until it’s too late, however the current COVID-19 crisis should serve as a reminder that all those who personally own a business, are company directors, or even those in professional services should take legitimate steps to protect their assets. Much like when Kerry Packer told everyone who […]
ReadmoreCOVID-19 | Director’s duties amid recent changes to insolvency law
With the impact of COVID-19 well and truly being felt by business, many may be heartened by the Government’s recent temporary changes to insolvency laws. What all directors need to remember however, is that their conduct is not only policed by sections 588G and 588M of the Corporations Act 2001 (Act), but also by sections […]
ReadmoreAnti-phoenixing legislation finally passes through Parliament
After having been introduced to the Commonwealth Parliament on 13 February 2019, then re-introduced on 4 July 2019, the Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019 finally passed through both Houses on 5 February 2020. As its name suggests, the Bill introduces a number of new measures aimed at combating illegal phoenix activity in Australia. Illegal […]
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