On 27 March 2019, the Federal Court of Australia delivered an important decision demonstrating the Court's willingness to assist liquidators to streamline the procedural aspects of liquidations using technology with the aim of conserving assets for the benefit of creditors.

On 21 September 2018, the Supreme Court of Western Australia Court of Appeal delivered the eagerly anticipated decision in Hamersley Iron Pty Ltd v Forge Group Power Pty Ltd (In Liquidation) (Receivers and Managers Appointed)1. The appeal decision has come down on the side of what many considered to be the correct position for set off compared to the findings in the first Hamersley Iron Pty Ltd v Forge Group Power Pty Ltd (In Liquidation) (Receivers and Managers Appointed)2 case.

On 1 July 2018, the stay on ipso facto clauses introduced by the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Act 2017 (Act) came into effect and will apply to contracts entered into on or after that date. The Act, left a number of issues up in the air which were expected to be filled by regulations. Those regulations, and a declaration, were released in late June 2018, providing little time for contracting parties, and their advisors, to understand how the new laws would impact them before their commencement.

The Stay

The Supreme Court of Western Australia has recently made a freezing order in the matter of Trans Global Projects Pty Ltd (In Liquidation) (TGP) v Duro Felguera Australia Pty Ltd (Duro) [2018] WASC 136.

This decision sheds light on:

In this newsletter, we will explore how the new impending ipso facto reforms, which come into effect on 1 July 2018, could affect landlords under commercial leases or parties under other contractual arrangements.

What are the Ipso Facto Reforms?

The ipso facto reforms seek to prevent certain termination and other ipso facto rights under a contract from being enforced against a counterparty:

In September 2017, the Australian government introduced the most significant reforms to Australia's insolvency regime for the past 30 years with the enactment of the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Act 2017 (Cth).

As we attempt to mitigate the potential effects of the COVID-19 pandemic on our global supply chain, stakeholders should be actively considering downstream impacts. In this current environment, considering prospective internal and external bankruptcy and restructuring threats may be more important than ever.

Introduction

Introduction

Executive Summary

• New legislation will introduce permanent and temporary reforms to the UK restructuring and insolvency regime
• Permanent reforms: company moratoriums; restructuring plans; the prohibition of insolvency termination clauses in supply contracts
• Temporary reforms: suspension of the director wrongful trading offence; restriction on the service of statutory demands and winding up petitions

Overview