Key Points:
A forbearance arrangement is a useful instrument to ensure that both the lender and the customer are aligned on the proposed turnaround or workout.
One of the many changes to be implemented as part of the Federal Budget delivered last night was a change to the Fair Entitlements Guarantee (FEG) (previously known as the General Employee Entitlements and Redundancy Scheme or GEERS), which guarantees certain unpaid employee entitlements in the event of insolvency or bankruptcy of that person's employer.
Key Points:
The NSW Supreme Court says it can provide directions on an administrator's commercial decision on the basis of the liability assumed by administrators and their partners.
Key Points:
For a company to be entitled to subrogation under section 560, it must ensure that it meets the strict requirements of section 560 and does not pay entitlements directly to the relevant company's employees.
Six month extensions to convening periods should not be seen as a fait accompli, particularly if the administrator's application is opposed.
There is a commonly held belief that courts will readily grant an administrator's application for an extension to the convening period. This might have been true once, but it is fast turning into an urban myth, judging by two recent decisions in the Federal Court.
Justice Jacobson's unwillingness to depart from the interests of the majority in relation to Nine Entertainment should give parties confidence that Schemes remain an effective way to effect debt for equity swaps or similar transactions.
Justice Jacobson's unwillingness to depart from the interests of the majority in relation to Nine Entertainment should give parties confidence that Schemes remain an effective way to effect debt for equity swaps or similar transactions.
Courts are willing, in certain circumstances, to consider the commercial realities of voluntary administrations, and can be flexible.
Australian banks have historically relied on formal liquidation, voluntary administration and receivership processes available under the under the Corporations Act 2001 (Cth) and under general law where informal restructurings have failed. There has been little appetite for exploring alternative methods to exit distressed situations by debt trading.
Key Points:
What the protracted negotiations surrounding Nine Entertainment have demonstrated is the importance of an interested party being able to assert they have an economic interest in the company.