Welcome to the first edition of the Herbert Smith Freehills Guide to Restructuring, Turnaround and Insolvency, Asia Pacific .
This week’s TGIF considers Clive Palmer’s recent challenges to the constitutionality of the Court’s power under the Corporations Act to issue examination summonses.
What happened?
On 18 January 2016, administrators were appointed to Queensland Nickel Pty Ltd (QNI) pursuant to s 436A of the Corporations Act 2001 (Act). The creditors subsequently resolved that QNI be voluntarily wound up and the administrators were appointed as liquidators (the General Purpose Liquidators).
In a judgment of remarkable length, erudition and temporal scope handed down on 28 September 2016, the Full Court of the Australian Federal Court allowed the shipowners’ appeal in Ship “Sam Hawk” v Reiter Petroleum Inc [2016] FCAFC 26.
The recent decision of the Federal Court of Australia in Australian Securities and Investments Commission v Sino Australia Oil and Gas Limited (prov liq apptd) [2016] FCA 42 serves as a timely reminder to insolvency practitioners to confirm that their appointment as voluntary administrators has been validly made in accordance with section 436A of the Corporations Act 2001 (Cth) (the Act).
Facts
In brief
In an announcement made on 23 August 2016, the Federal Government has provided insolvency practitioners with a further six months to implement certain provisions of the Insolvency Law Reform Act 2016 (Cth) (Act). The Act is aimed at streamlining registration and disciplinary processes and consolidating conduct and procedural requirements, to reduce costs associated with and improve timeliness of external administrations and ultimately increase creditor returns.
Structure of reforms
Accolade is a very useful illustration of how a court exercises its discretion when a financier's failure to register its security interests properly was inadvertent.
When will a court exercise its discretion to grant an extension of time for the registration of security interests on the Personal Property Securities Register (PPSR)? The NSW Supreme Court has given some guidance in In the matter of Accolade Wines Australia Limited and other companies [2016] NSWSC 1023, specifically regarding:
Judge Chapman’s judgment is obviously a welcome development for participants in the structured capital markets, particularly those who transact regularly with US counterparties.
This week’s TGIF considers the case of Compton v Ramsay Health Care Australia Pty Ltd [2016] FCAFC 106, where the Court exercised its power to “go behind” a judgment upon which a petitioning creditor relied as proof of a debt that was owed.
WHAT HAPPENED?
The bar for recovering assets that have been dubiously transferred out of an insolvent company may not be as high as one might think.
Background
On 14 June 2016, in its judgment delivered in Great Investments Ltd v Warner [2016] FCAFC 85, the Full Court of the Federal Court of Australia confirmed that a benefit transferred from a company without authority can only be retained by the recipient in very limited circumstances.