The House of Lords has ruled that English assets of the HIH group of companies are to be remitted to the Australian liquidators for distribution under Australian law. This briefing discusses the background to McGrath and another and others v Riddell and others [2008] UKHL 21 and the implications of the ruling.

Background

The House of Lords recently had to consider whether the English court should remit assets when faced with a request to do so by a foreign court.

Australia is a member of both the Basel Committee and the G20 and in November, Brisbane was host to the G20 Leaders' Summit.

The agenda focussed on increasing global growth, jobs and economic stability.  Despite the positive G20 intentions, David Cameron was quoted as saying "red warning lights are once again flashing on the dashboard of the global economy".

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Australia and the United States have much in common. We have a shared history, a common language, and a similar common law-based legal system governing a federated nation occupying a large land mass blessed with abundant natural and human resources. The United States is one of Australia’s greatest trading partners, and we welcome inward investment from the U.S. with most favoured nation trade terms. We also enjoy a friendship and strategic alliance that goes back over a century.

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Long-awaited law reform to bring Australia's insolvency regime into step with many of its trading counterparts is slated to be enacted in the second half of 2017. The text of the law is currently before parliament for debate. If passed, Australia will see:

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The Australian government has released draft legislation which proposes significant legislative change to insolvency laws in Australia. One of the changes proposed, is that directors will not be liable for insolvent trading in certain circumstances where the company is undertaking a restructure.

Under the proposed safe harbour reform, directors will not be liable for debts incurred whilst the company is insolvent if they can show that:

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Japan

Report published on ensuring fair and timely disclosure of information to investors. The FSA announced that the Task Force on Fair Disclosure Rule of the Working Group on Financial Markets of the Financial System Council has published the “Report - Ensuring fair and timely disclosure of information to investors.” (3/3/2017)

Hong Kong

The increase in the availability of alternate capital in Australia over the past decade has provided a landscape for well-tested global restructuring techniques to be applied locally. This includes 'loan to own' strategies.

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The use of pre-packs or pre-positioned asset sales in Australia has traditionally been limited. This is a result of impediments to such transactions under the Australian legislative insolvency regime.

The interplay of these impeding factors means that there are few true pre-pack transactions in Australia. However, significant reform to the Australian insolvency regime is expected to be implemented in 2017. We wrote about the main aspects of that reform in our last article, `Australian insolvency law reforms aim to increase business restructuring opportunities'

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On 22 May 2020, Justice Black of the Supreme Court of NSW issued judgment In the matter of Wollongong Coal Limited and In the matter of Jindal Steel & Power (Australia) Pty Ltd [2020] NSWSC 614. The judgment sets out his Honour’s reasoning for granting the orders sought in a largely unprecedented application to effectively ‘re-enliven’ two schemes of arrangement which automatically terminated prior to being completed.

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