The High Court has recently confirmed in Willmott Growers Group Inc v Willmott Forests Limited (Receivers and Managers Appointed) (In Liquidation) that a liquidator of a landlord company has power to disclaim a lease, thereby terminating the landlord’s liabilities and the tenant’s rights under the lease.
Following such a disclaimer, the tenant would then be left to prove its loss as an unsecured creditor in the winding up of the landlord company.
In the case of Bosi Security Services Ltd v Wright [2013] WASC 431, in which the court granted an interlocutory injunction preventing the sale of land by receivers despite acknowledging that the applicants’ case under the Trade Practices Act and Australian Consumer Law was not a strong one and had obvious deficiencies.
Facts
Introduction
Early in his or her appointment a liquidator in a creditors' voluntary liquidation (CVL) should consider applying to the Court to convert the CVL to a Court ordered winding up in insolvency. Conversion may benefit the unsecured creditors, in whose interests the liquidator acts, by enabling the liquidator to pursue claims and make recoveries not available in a CVL.
The reasons liquidators have applied for conversion include:
In brief - Your actions will depend on whether you acknowledge or dispute the debt
If you are contacted by a debt collector, you should be frank about what you plan to do. If you dispute the debt, you should get legal advice as quickly as possible.
Debt collectors don't go away if you ignore them
The recent case of Australian Securities and Investment Commission v Glenn Franklin and Ors VID1359/2013 has raised some interesting issues in respect of disclosure and the acceptance of referrals. The proceeding was ultimately unsuccessful and ASIC were ordered to pay the Defendants' costs.
Background
The case centred around the collapse of a large construction company which operated along the east coast. Walton Construction Pty Ltd headed operations in Victoria and New South Wales and Walton Construction (QLD) Pty Ltd headed operations in Queensland.
The decision of the Queensland Supreme Court (Court) in International Cat Manufacturing Pty Ltd (in liq) & Anor v Rodrick & Ors [2013] QSC 307 is a reminder that liquidators who commence proceedings may be personally liable for costs of the proceeding where they are unsuccessful in their claim.
FACTS
In brief - Court sets aside DOCA in Helenic v Retail Adventures
The NSW Supreme Court has recently set aside a deed of company arrangement (DOCA) on the basis that it was prejudicial to creditors who voted against it. The court appointed liquidators to the company.
Declaration of interest: CBP Lawyers acted for the plaintiffs in the case discussed in this article and also represent a large number of unsecured creditors of Retail Adventures Pty Ltd (Administrators Appointed).
In Madsen-Ries v Rapid Construction Ltd [2013] NZCA 489, the Court of Appeal considered an appeal concerning a liquidator's attempt to have a payment set aside.
The Australian Corporations Act 2001 provides that a company in liquidation that holds insurance for the benefit of third parties must pay the proceeds of the insurance policy to those third parties in priority to other creditors. Insurance proceeds payable to third parties under this provision are subject to deductions of "any expenses of or incidental to getting in" those proceeds. The liquidator of Brighton Hall Securities Pty Ltd sought directions from the court regarding the liquidator's entitlement to deduct his fees and expenses from the insurance proceeds.