On Friday 7 October 2016, McCullough Robertson successfully obtained orders on behalf of a US Chapter 7 bankruptcy trustee, requiring payment to her of money held by the Public Trustee of Queensland (Public Trustee) on behalf of a US bankrupt and her former husband. As far as we know, this is the first time that the Model Law on Cross-Border Insolvency (Model Law) has been used in Australia to obtain an order allowing the repatriation of funds to a foreign representative that are not the foreign debtor’s assets.
Welcome to this issue of Herbert Smith Freehills' Australian Construction Dispute Resolution Newsletter.
This newsletter updates you on legal developments relevant to your industry by featuring Australian court decisions and legislative developments of particular interest.
In this issue, we look at:
Section 447A
JOEL COOK Associate, Litigation and Dispute Resolution Group, McCabes
ANDREW LACEY Principal, Litigation and Dispute Resolution Group, McCabes
legal update
ONE SIZE DOES NOT FIT ALL
Varying the scope of the Part 5.3A moratorium on proceedings against companies in voluntary administration.
There have been recent reports that APR Energy PLC has threatened the Australian Government with a demand for $200 million in damages based on a claim under the Australia-United States Free Trade Agreement after it lost its security interest in multi-million dollar wind turbines it leased to an Australian company due to the operation of a provision in the Personal Property Securities Act 2009 (Cth) (PPSA).
When an individual becomes bankrupt, the bankrupt’s property vests in the bankruptcy Trustee with a number of exceptions. One exception is in respect of the bankrupt’s interest in a regulated superannuation fund, an approved deposit fund or an exempt public sector superannuation scheme.
Changes to Australia’s corporate insolvency laws are set to come into effect in 2017 and will result in an increase of powers for creditors in external administrations.
IN BRIEF
Two recent decisions have determined the applicability of security for payment legislation to insolvent contractors. One decided that the legislation does not apply to contractors in liquidation. The other decided that the legislation can be used by bankrupt contractors. At first glance, the decisions seem to be at odds, but on closer analysis the two decisions are not inconsistent.
Introduction
Following on from the Government’s National Innovation and Science Agenda,the Productivity Commission’s report into Business Set-Up, Transfer and Closure (‘the report’) released in December 2015 called for a number of reforms to the Corporations Act 2001 (Cth) (‘the Act’), that aim to reduce the stigma associated with insolvency and to assist recovery. We discuss two of these below.
‘Small liquidation’ process
In our previous bulletin we discussed the ‘safe harbour’ model in the Government’s suggested reforms to the current insolvency laws.
This bulletin considers another of the focus questions in the Proposal Paper: the voiding of ipso facto clauses relating to insolvency events.
Background