Commonwealth of Australia v Tonks [2023] NSWCA 285
In this decision, the Court of Appeal of the Supreme Court of NSW considered the interplay between the priority regimes under ss 556 and 561 of the Corporations Act 2001 (Cth) (Act) in resolving a contest between a liquidator’s claim for remuneration and the entitlements of former employees to be paid out of circulating assets.
The Court of Appeal confirmed the first instance decision of Justice Black in finding that:
Businesses worldwide are feeling the pressure of historic inflation and rising interest rates. UK insolvencies have reached their highest level since 2009, while numbers are also increasing in Australia, Canada and China.
This article examines the latest restructuring and insolvency trends – including zombie companies, landmark court decisions, and new legislation in Canada and the EU.
‘Zombie companies’ could lead to a wave of insolvencies
In this week’s TGIF, we examine the recent case of Re Eliana Construction and Developing Group Pty Ltd [2023] VSC 639 which considers guarantor subrogation rights in insolvency scenarios.
Key takeaways
In brief
The Federal Court has recently conferred examination powers on an offshore trustee who was foreign representative for the purposes of obtaining Model Law recognition of a Swiss insolvency proceeding for the purposes of undertaking public examinations in Australia.
The decision is a reminder of the flexibility of the Model Law in assisting the recovery of assets and claims in aid of a foreign insolvency proceeding.
Key takeaways
We discuss the Federal Court of Australia’s judgment and distil insights to assist trustees in bankruptcy navigate difficult estates and deal with recalcitrant bankrupts.
Introduction
In a recent case, the early restructuring was proven as a useful tool for practitioners in circumstances where there is value in moving quickly to affect the restructure prior to the first meeting of creditors.
Case Analysis: Re Richstone Plumbing Pty Ltd (Administrators Appointed) [2023] VSC 112
Facts
Richstone Group was a large plumbing contractor, who, due to matters including the economic conditions of the construction industry, earlier this year sought to implement a restructure to continue trading.
What is a Bankruptcy Notice?
On 14 September 2023, the Australian Securities and Investments Commission (ASIC) released Consultation Paper 372 "Guidance on insolvent trading safe harbour provisions: Update to RG 217".
The Western Australia Court of Appeal has provided clarity concerning insolvency practitioner independence following pre-administration services and whether those pre-administration services can disentitle insolvency practitioners to remuneration.