A recent decision confirms that liquidators can require creditors and other persons with relevant knowledge about the affairs of the company in liquidation to provide information.
[2007] NZCA 122
Decision of The Court Of Appeal of New Zealand on Sham and Alter Ego Trusts
Facts and Decision
Case law on the new insolvent transactions regime is scarce, even though the changes were introduced three years ago. The High Court's recent decision in Blanchett v McEntee Hire Holdings Limited examines, for the first time in New Zealand, central principles in the new voidable transactions regime.
INTRODUCTION
The use of trusts for asset protection purposes is well established and – in principle – not improper. However, recent history has seen increasing attempts by creditors to have transfers of assets unwound. A recent UK Supreme Court case saw the Court effectively achieve this by way of a resulting trust finding.1 This article considers the issue from a different angle: insolvency legislation.
In Re Hin-Pro International Logistics Ltd the Hong Kong Court of Appeal had to consider whether it had jurisdiction to grant leave to amend a creditor's petition, and if so, whether it should do so.
On Friday afternoon the government announced temporary changes it intends to make to the Companies Act 1993 (the Act) to assist companies facing financial stress during the COVID-19 pandemic.
Summary of proposals
The proposed changes include:
As mentioned in Hesketh Henry’s article “COVID-19: Insolvency law changes” (https://www.heskethhenry.co.nz/insights-opinion/covid-19-insolvency-law-changes/), Grant Robertson has announced that the Government will soon be introducing legislation to make temporary changes to the Companies Act 1993 (“Act”) to help companies facing insolvency due to the COVID-19 pandemic.
Christchurch based company Cryptopia Limited (in liquidation) (Cryptopia) operated a cryptocurrency exchange. Account holders were able to deposit cryptocurrencies into the exchange, and carry out trades with each other.
In January 2019 the exchange was hacked and cryptocurrencies valued at approximately NZD30m were stolen. Cryptopia closed after the hack, re-opened for a short period, and was then placed into insolvent liquidation in May 2019. David Ruscoe and Russell Moore of Grant Thornton New Zealand were appointed liquidators.
The Ministry of Business, Innovation and Employment has published a Cabinet Paper outlining proposed reforms to New Zealand's insolvency laws to take account of certain recommendations made in the second report of the Insolvency Working Group from May 2017.