Solving the ‘classic insolvency conundrum’ – how should insufficient, comingled funds be distributed?
In Caron and Seidlitz v Jahani and McInerney in their capacity as liquidators of Courtenay House Pty Ltd (in liq) & Courtenay House Capital Trading Group Pty Ltd (in liq) (No 2),[1] the New South Wales Court of Appeal was faced with what it described as the ‘classic insolvency conundrum’: how to distribute funds to investors as equally […]
ReadmoreNew insolvency reforms to support small business recovery proposed to commence from 1 January 2021
The recently announced proposed insolvency reforms draw on key features from Chapter 11 of the Bankruptcy Code in the United States and aim to help more small businesses restructure and survive the economic impact of COVID-19. The reforms will cover around 76% of businesses subject to insolvencies today, 98% of whom have less than 20 […]
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 […]
ReadmoreLiquidators in the ongoing Queensland Nickel Pty Ltd (In Liquidation) litigation fail to recover $102 million but are successful in their uncommercial transaction claims
In Parbery & Ors v QNI Metals Pty Ltd & Ors[1] the Court held, amongst other things, that: payments totalling $102 million from the bank account of Queensland Nickel Pty Ltd (In Liquidation) (QNI) to Mineralogy Pty Ltd (Mineralogy) were not recoverable by the liquidators of QNI as they were disbursements of the funds of QNI Metals […]
ReadmoreWebinar | The Butterfly Effect – insolvency, class actions and government
Challenging economic times inevitably lead to increased litigation, from which government is not immune whether in the enforcement of powers or contracts or in the defence of ambit claims. This session examines recent changes in the current environment, exacerbated by COVID-19 challenges to the content of laws and the practical administration of justice and the […]
ReadmoreSmethurst takes on the AFP with a win, a loss and ultimately no charge
The High Court in Smethurst v Commissioner of Police:[1] were unanimous in their decision that a search warrant gained by the Australian Federal Police (AFP) in the notorious search and seizure of the Sunday Telegraph’s journalist Annika Smethurst’s home was invalid; and by a 4:3 majority, refused to grant injunctive relief to the journalist and NewsCorp, […]
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 […]
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 […]
ReadmoreCOVID-19 | Emergency Amendments to Insolvency Laws
Government moves to amend insolvency laws The Commonwealth Government announced a range of temporary amendments to certain insolvency laws as part of its economic response to COVID-19. The amendments will temporarily affect insolvency laws, corporate governance, and directors’ duties. The purpose of the amendments is to support otherwise viable businesses which will temporarily suffer financial […]
ReadmoreCOVID-19 | Cash is King – 4 ways your business can best respond to the challenges of COVID-19
The coronavirus (COVID-19) outbreak is undoubtedly tragic for the thousands affected, with Governments around the world having to act swiftly and assertively to protect vulnerable people. But there is underlying harm being caused to the economy, too – and the real impact of this cost is only just emerging. We’ve all heard the saying before […]
ReadmoreEarth to the Mothership: a reminder to liquidators bringing group unfair preference claims to follow the rules
Recently, some liquidators appear to prefer to commence unfair preference claims against multiple defendants within a single proceeding, rather than multiple separate proceedings. Proceedings commenced in this way are often referred to as ‘mothership proceedings’. The appeal of ‘mothership proceedings’ from the liquidators’ point of view is obvious. Justice Brereton in Re Bias Boating Pty Ltd[1] […]
ReadmoreInsolvent Corporate Trustees – a way forward to realising trust assets
The recent decision of Cremin, in the matter of Brimson Pty Ltd (In Liquidation) [2019] FCA 1023 (Cremin) helpfully clarifies the approach practitioners ought to adopt when realising the assets of an insolvent corporate trustee. Here, the liquidator was appointed to three companies which each operated “Snooze” franchises in their capacity as trustee of a […]
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