Liquidators and unsecured creditors beware: interim distribution of employee entitlements may mean later preference recoveries belong to a secured creditor

The recent decision of the Federal Court in Carter in the matter of Damilock Pty Ltd (Damilock) highlights the need for liquidators to review current practices when paying priority creditors (e.g. employee entitlements).

Facts

The plaintiffs were appointed as administrators of Damilock on 26 June 2007 and subsequently appointed as liquidators by creditors’ resolution at a meeting on 7 September 2007.

Filed under:
Australia, Employee Benefits & Pensions, Insolvency & Restructuring, Litigation, Cooper Grace Ward, Unsecured debt, Secured creditor, Liquidator (law), Corporations Act 2001 (Australia)
Authors:
Charles Sweeney
Location:
Australia
Firm:
Cooper Grace Ward
PPS leases - how the PPSA applies to your internal business structure

The PPSA (Personal Property Securities Act) will celebrate its first birthday on 30 January 2013.

The PPSA introduced fundamental changes for business structuring arrangements. Assets that are subject to non-arms’ length lease or hire arrangements can be at risk if the entity that has possession of the property under the lease or hire agreement is placed in liquidation or receivership.

What is a PPS lease?

A ‘PPS lease’ is the lease or hire of property for a period (including options):

Filed under:
Australia, Company & Commercial, Insolvency & Restructuring, Cooper Grace Ward, Personal property, Unsecured creditor
Location:
Australia
Firm:
Cooper Grace Ward