Insolvency - the impact of unreconciled accounts and funds available to a director

The Court at first instance held that the Applicants failed to establish that the Company was insolvent. The key findings that informed the Associate Judge’s conclusions included the following:

  • the funds that were available to the Company to pay its debts included funds in an offset account in the name of the director (and an account in the name of the director’s wife); and
  • the Applicants’ claims were based on unreconciled accounts of the Company.

The Applicants were granted leave to appeal and appealed the decision of the Court a quo.

Filed under:
Australia, Insolvency & Restructuring, Litigation, Piper Alderman, Litigation funding, Corporations Act 2001 (Australia)
Authors:
Mike Hayes , Antony Disciscio
Location:
Australia
Firm:
Piper Alderman
The impact of the Harman undertaking on the use of documents by an “eligible applicant” in respect of a right to sue assigned by a liquidator.

The Federal Court has clarified the ability of an assignee of a claim by a liquidator pursuant to s 100-5 of the Insolvency Practice Schedule to rely upon information and documents obtained from a public examination in private proceedings relating to the assigned claim: LCM Operations Pty Ltd, in the matter of 316 Group Pty Ltd (In Liquidation) [2021] FCA 324.

Takeaways:

Filed under:
Australia, Capital Markets, Insolvency & Restructuring, Litigation, Piper Alderman, Corporations Act 2001 (Australia)
Authors:
Mike Hayes , Antony Disciscio
Location:
Australia
Firm:
Piper Alderman