This week’s TGIF considers the recent decision of In the matter of PIC Lindfield 19 Pty Ltd (in liq)[2022] NSWSC 271, in which former directors of the company in liquidation failed to set aside summonses for public examination on the basis of alleged non-disclosure by the liquidators.

Key Takeaways

The following 6 cases have been reported in our Bankruptcy & Insolvency practice area:

Walton v ACN 004 410 833 Ltd (formerly Arrium Ltd) (in liq) — Insolvency | High Court upholds shareholders’ application for examination summons

In the past, the reliance on section 553C of the Corporations Act 2001 (Cth) (Act) as a ‘set-off’ defence to an unfair preference claim, under section 588FA of the Act, has caused controversy in the insolvency profession. Due to a recent decision of the Federal Court of Australia, the ‘set-off’ defence is no longer a defence to an unfair preference claim.

On 23 February 2022, WBHO Australia Pty Ltd and 17 other companies in the Probuild group (Probuild, or the Group), entered voluntary administration in Australia. Probuild is one of the largest construction groups in Australia, working on many large office, residential and resources related construction projects across the country.

In a recent case involving key stakeholders in the ‘Century Mine’ (Mine) – located in the lower Gulf of Carpentaria region in Northwest Queensland – the Supreme Court of Queensland considered an application brought by a liquidator and creditor for the termination of a winding up of pursuant to section 482(1) of the Corporations Act 2001 (Cth) (Application).

Background

The Mine was operated by Century Mining Ltd (formerly Century Zinc Ltd) (Century). It was one of the largest zinc mines in the world.

In brief - The collapse of national construction company ProBuild sent shockwaves through the industry with flow-on effects felt by many stakeholders. What role can early risk identification and mitigation play in saving a company from entering administration?

When a principal contractor or senior builder enters administration, there are a significant number of risks which, if navigated property, can be mitigated to minimise loss.

This week’s TGIF examines the decision of the Supreme Court of New South Wales in In the matter of Jana Pty Ltd [2022] NSWSC 112, considering whether a ‘genuine dispute’ exists  in relation to a debt claimed in a statutory demand where the debt arises from a poorly drafted deed.

Key Takeaways

Mr Badcock (the Respondent) was an undischarged bankrupt, and Mr Ambrose (the Applicant) was the trustee of his bankruptcy. The key issue for determination was the definition of property under the Bankruptcy Act, and whether the moving of monies into an interesting-bearing account by the Respondent was sufficient to change the character of income to after-acquired property which would vest in the Trustee’s Estate.

Litigation funding can play an important role in allowing liquidators to recover debts on behalf of liquidated companies, where there may be a real prospect of success in recovery proceedings but where obstacles such as funding or security for costs may present themselves.

ASIC v King [2021] FCA 1610

Background