Introduction
Another failed property developer has just been made bankrupt in Australia, this time with a difference – he was already bankrupt in New Zealand. Bank of Western Australia (Bank) v David Stewart Henderson (No. 3) [2011] FMCA 840 is another Australian cross-border insolvency case in which we have successfully tested the boundaries of the Cross-Border Insolvency Act 2008 (Cth) (the CBIA), this time with the Bankruptcy Act 1966 (Cth).
Facts
The Bridgecorp Group collapsed and receivers were appointed on 2 July 2007. The companies comprising the group were subsequently also placed in liquidation. The First and Second Defendants in the case were two of the Bridgecorp Group (Receivers and Managers appointed) (in Liquidation).
The directors faced numerous civil and criminal charges for alleged Wrongful Acts including alleged false statements in prospectuses, extension certificates and investment statements issued to prospective investors.
After four long years, Australia-based Centro Properties Group (“CNP”) has consummated a global restructuring that combines a debt-for-equity swap with an aggregation of its assets into a new real estate investment trust, Centro Retail Australia (“CRF”). Bracewell & Giuliani was first engaged by Centro’s private placement noteholders in December 2007. As the restructuring progressed Bracewell’s role expanded to becoming lead counsel for CNP’s entire international lending syndicate consisting of more than 90 distressed debt investors, institutional investors and commercial bank
Background: the Timbercorp Group
Australia needs to rein in ipso facto clauses in order to develop a turnaround culture for financially troubled companies.
Within hours of Kodak's move into Chapter 11 bankruptcy, the internet was alive with bad jokes:
"Kodak's business didn't develop the way they expected."
"Kodak was overexposed to the GFC."
"Kodak's Chapter 11 hearing was held in camera."
Australian businesses and liquidators might be forgiven for thinking that the bigger joke is Australia's lack of a Chapter 11 turnaround culture.
Air Australia has hit the news recently due to the appointment of voluntary administrators to the airline and the consequences this has had on the business, its customers, suppliers and staff.
Whilst Air Australia is not a franchise, it still offers a good case study for examining financial distress in the operation of a business and considering options that may be available.
This update considers what are indicators of financial distress and offers tips both for franchisors and franchisees in assessing developing situations and options for moving forward.
The statutory exemption can be refreshed each time a person signs a new contract, even if he/she continues to hold the same position.
Receivers of a failed company have been unable to convince the Federal Court that statutory restrictions on termination payments reduced the payout entitlement of a senior executive (White v Norman; In the Matter of Forest Enterprises Australia Limited (Receivers and Managers Appointed) (in Administration) [2012] FCA 33).
Background
On 5 October 2011, the NSW Supreme Court upheld an application pursuant to s 440D(1) of the Corporations Act 2001 (Cth) (the Corporations Act) for leave to bring and continue proceedings against a defendant under voluntary administration.
The Corporations Amendment (Phoenixing and Other Measures) Bill 2012 (Cth) was introduced into Federal parliament on 15 February 2012.
The Bill proposes to amend theCorporations Act 2001 (Cth) and contains 2 key sets of measures:
One could almost be forgiven for thinking that nowadays delayed second creditors' meetings are just par for the course.
Applications to extend the time for the second meeting - often for months - have become quite routine, and are rarely (if ever) refused.
Some observers might thus wonder if we are losing sight of one of the objectives of the VA procedure - that it "should be expeditious".[1]