In Sharpe v WH Bailey & Sons Pty Ltd [2014] FCA 921, Justice Gleeson found that the Farm Debt Mediation Act 1994 (NSW) (FDM Act) did not operate to prevent an individual from pursuing their rights under the Bankruptcy Act1966 (Cth), even though those rights may have been related to a farm mortgage.  In doing so, Justice Gleeson confirmed that the Bankruptcy Act1966 (Cth) will have priority over the FDM Act where the requirements of section 5 of the FDM Act are met.

FACTS

In the decision Young, Jr (on behalf of debtor-in-possession of Buccaneer Energy Ltd) v Buccaneer Energy Ltd [2014] FCA 711, the Federal Court of Australia considered whether Chapter 11 proceedings under the United States Bankruptcy Code should be recognised as a foreign main proceeding under the Cross-Border Insolvency Act 2008 (Cth) (CBIA) and Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade Law (Model Law).

In the decision of Divitkos, in the matter of ExDVD Pty Ltd (in liq) [2014] FCA 696, White J may have created a new class of equitable subrogation by allowing a secured creditor to prove in a liquidation as a priority creditor in respect of amounts paid to employees under s433 of the Corporations Act.

FACTS

The Financial System Inquiry was formed on 20 November 2013 by our Federal Treasurer to examine how our financial system could be positioned to best meet Australia’s evolving needs and support economic growth. The Inquiry received over 280 first round submissions and released it’s Interim Report earlier this week. ^[1] 

The High Court recently delivered judgment in the matter of Stewart v Atco Controls Pty Ltd (In Liquidation).^[1] The case turned on the application of the well-known principle in Universal Distributing

In the decision Equititrust Limited (In Liq) (Receiver Appointed) (Receivers and Managers Appointed) in its capacity as responsible entity of the Equititrust Income Fund v Equititrust Limited (In Liq) (Receiver Appointed) (Receivers and Managers Appointed) in its own capacity [2014] FCA 692,the Federal Court of Australia considered an application to set aside or stay indefinitely liquidator examinations of former auditors under s596B of the Corporations Act 2001 (Cth).

The decision Akers as a joint foreign representative of Saad Investments Company Limited (in Official Liquidation) v Deputy Commissioner of Taxation [2014] FCAFC 57 demonstrates that Australian Courts may be willing to depart from the philosophical basis for cross border insolvency in order to protect the interests of Australian based creditors.

Background

In Re John Pettit Pty Limited (Subject to a Deed of Company Arrangement) [2014] NSWSC 728, the Supreme Court of NSW considered an application by the deed administrators of John Pettit Pty Ltd (John Pettit) seeking directions to sell property potentially owned by third parties and orders which limited the Deed Administrators’ personal liability in relation to the sale.

BACKGROUND

In the recent decision of First Strategic Development Corporation Limited (in liq) and Anor v Chan and Ors [2014] QSC 60, the Supreme Court of Queensland considered the solvency of a company with no assets or formalised line of credit, but with a director who claimed to be willing to fund the $2.5 million that the company had committed to spending.

FACTS

In DSG Holdings Australia Pty Ltd v Helenic Pty Ltd [2014] NSWCA 96, the Court of Appeal considered the meaning of the “interests of the creditors as a whole” under section 600A of the Corporations Actand the circumstances in which the Court will intervene to set aside or impose conditions on resolutions passed at creditors meetings.

BACKGROUND