​Despite initial uncertainty, the Insolvency Practitioners Bill has been picked up by the new government. It will be amended by Supplementary Order Paper.

That SOP is yet to be released. Whether the amendments follow the direction agreed by the former Cabinet remains to be seen.

The Bill is on the Order paper under the name of new Commerce Minister Kris Faafoi. Chapman Tripp has been advised by the Leader of the House that Faafoi is awaiting advice from officials on “possible amendments”.

​Liquidators cannot examine directors to obtain private financial information on which to judge their worth as prospective defendants.

This position was reinforced by the Court of Appeal in a recent decision.

The Supreme Court’s decision in McIntosh v Fisk has confirmed how the courts will deal with claw back claims under the voidable transactions regime in the context of Ponzi schemes. Liquidators’ recoveries will be limited to the fictitious profits for which there was no value given.

​The Supreme Court this week provided clarification on the extent to which a disputed damages claim should be taken into account when deciding whether a “company is unable to pay its due debts".

At issue was whether the enquiry should be limited to those debts that were or were shortly to become legally due, or whether a more practical and commercial approach be taken? We look at the decision.

Two High Court decisions setting aside creditors' compromises give new guidance on the parameters of Part 14 of the Companies Act 1993.

The regime:

• cannot require the release of the company's guarantors (but that may not be the case under Part 15), and
• requires separate classes of creditors based on a pragmatic, business-oriented approach with regard to both the legal rights and economic interests of creditors.

No release of the company's guarantors

​The Insolvency Working Group's second and final report, released last week, deals with voidable transactions and Ponzi schemes. It proposes a number of changes to the voidable transaction regime, including returning the “gave value" defence to its earlier, more limited, form.

It makes a range of other recommendations across the law of insolvency. Key among them are that the IRD's preferential debt be subject to a limit, and that gift card and voucher holders be treated as preferential creditors.

​A High Court finding this month that a liquidator fabricated a key document and failed to account for receipts of over half a million dollars highlights the need for regulation of the insolvency profession.

The case

The liquidator, Geoff Martin Smith, claimed to have sent a notice under section 305 of the Companies Act to the bank holding security over the company in liquidation. The notice required the bank’s election, in default of which its security would be deemed surrendered. The bank said it never received the notice.

The Ministry of Business, Innovation and Employment (MBIE) is seeking submissions by 7 October on recommendations from the Insolvency Working Group.

We canvass the issues. Michael Arthur of Chapman Tripp is a member of the Working Group.