In brief

In brief

Courts have recently approved a number of means by which external administrators can realise value from insolvent agricultural managed investment schemes and deal with the rights of growers and sponsor creditors:

There have recently been a number of significant developments in relation to schemes of arrangement. These include:

• the Federal Court refusing to make orders convening a meeting of CSR’s shareholders to vote on a demerger proposal by way of scheme, on public policy and commercial morality grounds relating to CSR’s potential asbestos liabilities
• the Government’s corporate law advisory body recommending significant reforms to the scheme regime, and
• developments regarding ‘hostile schemes’.

Each of these developments is discussed below.

Introduction

The New South Wales Supreme Court has found a solicitor liable for facilitating unlawful ‘phoenix’ activity.1 Phoenix activity consists of transferring business assets out of an old debt-laden company (which subsequently goes into liquidation) to a new debt free company. The new company carries on the business of the old company; but the assets are put beyond the reach of the creditors of the old company.

Introduction

By unanimous decision in Bruton Holdings Pty Limited (in liquidation) v Commissioner of Taxation1, five members of the High Court have reversed a controversial decision of the Full Federal Court to confirm that the Commissioner of Taxation (Commissioner) cannot ‘leap-frog’ other creditors in a liquidation.2

Summary

In the matter of Maiden Civil (P&E) Pty Ltd; Richard Albarran and Blair Alexander Pleash as receivers and managers of Maiden Civil (P&E) Pty Ltd & Ors v Queensland Excavation Services Pty Ltd & Ors [2013] NSWSC 852

Overview

There is a recognised ambiguity in the transitional provisions of the Personal Property Securities Act 2009 (Cth) (PPSA),relating to the issue of whether an ‘umbrella agreement’, governing the supply of goods on retention of title (RoT) terms entered into prior to 30 January 2012, will be an effective transitional security interest.

The Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 (Regulations) to amend the structure of UK annual reports have been published and laid before Parliament.

On 19 April 2013, Justice Foster of the Federal Court of Australia handed down judgment in the case of Eopply New Energy Technology Co Ltd v EP Solar Pty Ltd [2013] FCA 356. The question before his Honour was whether a foreign arbitral award made in China ought to be enforced in Australia against an Australian company in liquidation.