Facts

In April 2015, administrators were appointed to several companies within the NewSat Group. Secured lenders appointed receivers who attempted, unsuccessfully, to restructure the business. Following this, the group was placed into liquidation.

There is growing concern in business news and media about the increase in insolvency appointments. Many experts are warning that the country is going to see a significant rise in insolvencies following the pandemic.

What’s the cause?

Practitioners will be pleased to know that the NSW Supreme Court has provided clarity on the order of priority for employee debts and secured creditor claims.

The matter, In the matter of Spitfire Corporation Limited (in liquidation) and Aspirio Pty Ltd (in liquidation), involved the liquidators of two insolvent companies (Spitfire Corporation Ltd and Aspirio Pty Ltd) seeking directions under s 90-15 of the Insolvency Practice Schedule (Corporations).

If a judgment has been entered against you, the judgment creditor may ask you provide them with a financial statement and copies of your bank statements and pay slips. You may be wondering what power the judgment creditor has to require you to provide this information.

The simple answer is, a judgment creditor can utilise the various enforcement procedures to obtain evidence of your financial situation to assist them with recovering the judgment debt from you.

Examination Notice

Summary

On 16 December 2021, judgment was handed down in Federal Court of Australia proceedings QUD 31 of 2021, which found that set off provisions under the Corporations Act2001 (Cth) (Act) cannot be relied on to reduce an unfair preference claim under section 588FA of the Act.

The judgment will likely see practical consequences in the increased capacity of liquidators to acquire voidable transactions under the statutory priority regime.

In the matter of 1A Eden Pty Limited [2021] NSWSC 82 the Court considered whether a disagreement between directors was solemn enough to wind up the company.

P, a director, applied to wind up a company that was the trustee of a unit trust.

P’s fellow directors were S and D. P said there was a deadlock and relations between them had broken down.

P and S were builders. D was a property developer. The 3 agreed to found the Co to develop a site together with P and S to share 50% of the profits and D to take the remaining half as unit holders.

Part 1: A Broad Overview of Bankruptcy

‘As privileged professionals, who live by the words of the English language, lawyers have a special duty to be clear in what they say and write’

When discussing any area of law, precision is essential.

A common source of confusion amongst both lawyers and the public generally is the difference between insolvency and bankruptcy. Though you may see the terms being used interchangeably (especially in legal dramas), the two concepts are distinct.

A Practical Guide to Bankruptcy:

Part 1: A Broad Overview of Bankruptcy

‘As privileged professionals, who live by the words of the English language, lawyers have a special duty to be clear in what they say and write’[1]

When discussing any area of law, precision is essential.

It goes without saying that the law is a complex language. Indeed, it is so complex, and at times, so incoherent, that the Merriam Webster Dictionary has a specific term for it: ‘legalese’. As the law of insolvency is no exception, this article has compiled some of the most frequently used (and ambiguous) insolvency terms.

Bankruptcy notice

Amirbeaggi as trustee of the bankrupt estate of Hanna v Hanna [2021] FCA 988

Background:

This past week the Federal Court handed down an interesting bankruptcy decision concerning the late lodgement of cross-claims. The respondent in this matter on two separate occasions failed to serve a cross-claim within the allotted time. This was despite being granted an extension. The question for the court was whether should be granted to permit the applicant to serve the cross-claim notwithstanding these delays.