In our December 2019 newsletter we commented that the Madoff bankruptcy had one more big case to go, chasing USD3.2b held by foreign banks. The US Supreme Court has just refused to hear an application by major banks and companies, including Koch Industries Inc, to prevent Mr Picard, the bankruptcy trustee, from pursuing claims aimed at recouping funds that were transferred overseas. In the meantime, Mr Madoff has been refused early
New Zealand's insolvency practitioner licensing regime came into force on 1 September 2020. Ahead of that date, controversial insolvency practitioner, Damien Grant, applied to join RITANZ, which was a requirement for him to be licensed to continue as an insolvency practitioner, because he was not a chartered accountant. RITANZ considered his application in June 2020 and refused it on good character grounds. RITANZ's decision has not been publicly released, but is understood to be founded on Grant's historical dishonesty convictions.
The High Court, in Quinn v Toon [2020] NZHC 816, confirmed that only the reasonable costs of the liquidators will be recoverable.
Ms Toon applied for orders under ss 276 and 278 of the Companies Act 1993 to approve her remuneration claiming $101,729 plus GST and expenses for her work as the liquidator of Investacorp Holdings Ltd.
This was a solvent liquidation. While there were no creditors, there were disputes between shareholders that Ms Toon spent a considerable amount of time investigating.
The High Court judgment in Commissioner of Inland Revenue v Livingspace Properties Ltd (in rec and in liq) [2020] NZHC 1434 is another chapter in the continuing, bitter saga between Robert Walker, the liquidator of Livingspace and David Henderson (through his wife as proxy).
The Government has published the COVID-19 Response (Further Management Measures) Legislation Bill (the Bill), an omnibus bill containing amendments (both temporary and permanent) to several acts. These amendments aim to both assist organisations in effectively managing the “immediate impacts of the response to COVID-19”, as well as mitigating some of the pandemic’s “unnecessary and potentially longer-term impacts on society”.
Former liquidator Geoffrey Smith has been convicted on six charges, including stealing $130,000 from two companies to which he had been appointed liquidator. Mr Smith was also convicted of perjury in connection with the same liquidations.
High Court provides guidance on voluntary administration and creditors’ meetings under COVID-19 Alert Level 4
A recent decision of the High Court provides helpful guidance for insolvency practitioners on how aspects of the voluntary administration regime should operate in the context of the COVID-19 pandemic.
In the two judgments, Commissioner of Inland Revenue v Salus Safety Equipment Ltd (in liq) [2020] NZHC 1368 and Commissioner Inland Revenue v Green Securities Ltd (in liq) [2020] NZHC 1371, Associate Judge Bell significantly reduced the amount recoverable in each proceeding by liquidators.
Both cases considered applications from liquidators to seek approval of their remuneration. In Salus the amount claimed was $91,600 and in Green Securities it was $159,044.
Christchurch based company Cryptopia Limited (in liquidation) (Cryptopia) operated a cryptocurrency exchange. Account holders were able to deposit cryptocurrencies into the exchange, and carry out trades with each other.
In January 2019 the exchange was hacked and cryptocurrencies valued at approximately NZD30m were stolen. Cryptopia closed after the hack, re-opened for a short period, and was then placed into insolvent liquidation in May 2019. David Ruscoe and Russell Moore of Grant Thornton New Zealand were appointed liquidators.
The UK Supreme Court in Bresco Electrical Services Ltd (in liq) v Michael J Lonsdale (Electrical Ltd) [2020] UKSC 25 has decided that the adjudication regime for building disputes is not incompatible with the insolvency process.