It is important for a receiver or voluntary administrator to ensure that a proper sales process is undertaken relevant to the circumstances as there is no "one-size-fits-all" approach.

On 2 August 2021, the Treasury released a consultation paper seeking feedback on changes to improve creditors’ schemes of arrangement in Australia (the Consultation Paper). The submissions process has now closed.

In Anchorage Capital Master Offshore Ltd v Sparkes (No 3); Bank of Communications Co Ltd v Sparkes (No 2),[1] the NSW Supreme Court handed down judgment in two proceedings (which were heard together) arising from the failure of Arrium and its broader corporate group.

On the 2 August 2021 Treasury released a consultation paper titled ‘Helping Companies Restructure by Improving Schemes of Arrangement. The consultation is aimed at reforming Australia’s scheme of arrangement procedure.

This week’s TGIF considers a recent decision of the Supreme Court of New South Wales, Re Antqip Pty Ltd (in liq) [2021] NSWSC 1122, concerning whether section 588FL of the Corporations Act2001 (Cth) applied to vest a security interest in the company that was granted after the ‘critical time’.

Key Takeaways

The recent decision of Quin v Vlahos [2021] VCSA 205 (Quin) in the Victoria Supreme Court of Appeal has provided important commentary on when third party funds can be considered in determining a company’s solvency, as well as relying upon unreconciled accounts to prove solvency.

In Australia, public companies are required to have at least three directors (s 201A(2) of the Corporations Act 2001 (Cth) (Act)). However, in exceptional circumstances, a public company might find itself with fewer than three directors – for example, where the other board directors resign because of some disagreement.

It goes without saying that the law is a complex language. Indeed, it is so complex, and at times, so incoherent, that the Merriam Webster Dictionary has a specific term for it: ‘legalese’. As the law of insolvency is no exception, this article has compiled some of the most frequently used (and ambiguous) insolvency terms.

Bankruptcy notice

Amirbeaggi as trustee of the bankrupt estate of Hanna v Hanna [2021] FCA 988

Background:

This past week the Federal Court handed down an interesting bankruptcy decision concerning the late lodgement of cross-claims. The respondent in this matter on two separate occasions failed to serve a cross-claim within the allotted time. This was despite being granted an extension. The question for the court was whether should be granted to permit the applicant to serve the cross-claim notwithstanding these delays.

A recent NSWSC decision, In the matter of Sails Corp Pty Ltd [2021], confirmed the problematic task of rebutting a presumption of insolvency. In this matter, the defendant’s presumed insolvency arose from an unsatisfied Creditor’s Statutory Demand. Therefore, the defendant bore the onus of rebutting this presumption and establishing solvency.

Establishing Solvency:

Establishing solvency requires more than a bald assertion.