The High Court recently allowed a secured party to amend financing statements to correct a mistake as to the identity of the debtor, without losing the benefit of its initial time of registration.
The case was determined in the context of an application by Universal Trucks and Equipment Limited to maintain the registration of security interests. The liquidator of Chars Transport Limited (in liquidation) had made a demand under section 162 of the PPSA that Universal register a financing change statement that excluded two industrial trailers.
A recent case alleging serious misconduct by a liquidator highlights the need for New Zealand to reform the regulation of insolvency practitioners. The case, Official Assignee v Norris [2012] NZHC 961, illustrates the inadequacies of our current regime.
In Gibbston Downs Wines Limited and RFD Finance No 2 Limited v Perpetual Trust Limited HC Christchurch CIV-2010-409-00176 28 May 2012, the High Court considered the effect of registration of a subordination agreement on the respective priority of two perfected security interests registered on the Personal Properties Securities Register (PPSR).
From 28 September 2012 the maximum priority amount for employees in liquidations, receiverships and bankruptcies will increase from $18,700.00 to $20,340.00 per employee.
Liquidators, receivers and the Official Assignee in a personal bankruptcy must pay certain amounts to employees, in priority to ordinary unsecured creditors.
These preferential employee entitlements include:
The High Court decision of Official Assignee v Norris [2012] NZHC 961 examined whether the Official Assignee could apply for orders relating to Mr Norris' actions as liquidator of multiple companies, and whether adequate notice of his alleged failure to comply with his duties as a liquidator had been given.
In Aditude Advertising Limited (in liq.) v Techday Limited [2012] NZHC 1884, Aditude Advertising Limited (in liquidation) (Aditude) and Techday Limited (Techday), were members of the Bartercard system, a credit trading system. Under this system members could exchange goods and services without exchanging cash or other legal tender. Aditude went into liquidation with a significant credit in its Bartercard account for services rendered to Techday. The liquidators issued a statutory demand against Techday seeking to recover the actual cash value of the invoices issue
The recent decision in The Official Assignee v Grant Thornton (2012) NZHC 2145 addressed the obligation on a company's auditor to produce all relevant documents and information upon request by a liquidator pursuant to section 261 of the Companies Act 1993. Associate Judge Abbott held that the public interest in investigating the circumstances leading to a company's collapse trumped an auditor's claim to privacy and confidentiality.
Under section 241(4) of the Companies Act 1993 the High Court "may" order that a company which is unable to pay its debts be put into liquidation. While the Court retains a discretion not to order the liquidation of an insolvent company, it will not usually exercise that discretion in the absence of good reasons for doing so.
Justice Venning approved a scheme of arrangement under Part 15 of the Companies Act 1993 effecting the managed withdrawal by ACS (NZ) Limited from its insurance business in New Zealand. The Court noted that the Scheme provided the best opportunity for an ordered and efficient run-off and management of claims with minimal disruption in relation to the company's processes. In liquidation, the liquidators would need time to familiarise themselves with the operation of the company and would proceed on a cautious basis, which would likely result in a material delay in meeting claims.
The recent case ofBay Flight 2012 Limited v Flight Care Limited is a reminder that holders of common law liens must take care to ensure that their lien is not extinguished by giving up possession.