In a recent case involving key stakeholders in the ‘Century Mine’ (Mine) – located in the lower Gulf of Carpentaria region in Northwest Queensland – the Supreme Court of Queensland considered an application brought by a liquidator and creditor for the termination of a winding up of pursuant to section 482(1) of the Corporations Act 2001 (Cth) (Application).

Background

The Mine was operated by Century Mining Ltd (formerly Century Zinc Ltd) (Century). It was one of the largest zinc mines in the world.

The Federal Court’s recent decision in Kellendonk concerned a $350,000 loan made by the applicants, Mr and Mrs Kellendonk, to Ms Maria Jasienska-Dudek to help her buy a property in Midland, Western Australia (Property). Ms Jasienska-Dudek defaulted under the loan agreement and the parties subsequently entered an informal agreement which, after Ms Jasienska-Dudek became a bankrupt, led to some novel circumstances and a novel application of section 133 of the Bankruptcy Act 1966 (Cth) (the Bankruptcy Act).

In Re Cullen Group,[1] the Supreme Court of Queensland considered the determination of a preliminary question regarding the insolvency of Cullen Group Australia Pty Ltd (Cullen Group), which was placed into liquidation approximately four years prior to the hearing date.

In the recent decision of Cant v Mad Brothers Earthmoving,[1] the Court of Appeal of the Supreme Court of Victoria (Justices Beach, McLeish and Hargrave) considered whether the liquidator of Eliana Construction and Developing Group (in liquidation) (Eliana) could establish that a payment made to an unsecured creditor of Eliana by one of Eliana’s related companies was an unfair preference.

In the recent Gunns decisions, the Federal Court considered three separate unfair preference claims brought by the liquidators of Gunns Limited (in Liquidation) (Gunns) against:

In Shameeka Ien v. TransCare Corp., et al. (In re TransCareCorp.), Case No. 16-10407, Adv. P. No. 16-01033 (Bankr. S.D.N.Y. May 7, 2020) [D.I. 157], the Bankruptcy Court for the Southern District of New York recently refused to dismiss WARN Act claims against Patriarch Partners, LLC, private equity firm (“PE Firm“), and its owner, Lynn Tilton (“PE Owner“), resulting from the staggered chapter 7 bankruptcies of several portfolio companies, TransCare Corporation and its affiliates (collectively, the “Debtors“).

Joining three other bankruptcy courts, Judge Thuma of the District of New Mexico recently held that the rules issued by the Small Business Administration (“SBA“) that restrict bankrupt entities from participating in the Paycheck Protection Program (“PPP“) violated the Coronavirus Aid, Relief, and Economic Security Act, H.R. 748, P.L. 115-136 (the “CARES Act”), as well as section 525(a) of the Bankruptcy Code.

The Southern District of New York recently reminded us in In re Firestar Diamond, Inc., et al., Case No. 18-10509 (Bankr. S.D.N.Y. April 22, 2019) (SHL) [Dkt. No. 1482] that equitable principles in bankruptcy often do not match those outside of bankruptcy. Indeed, bankruptcy decisions often place emphasis on equality of treatment amongst all creditors and are less concerned with inequities to individual creditors.

Introduction

In Wells Fargo Bank, N.A., f/b/o Jerome Guyant, IRA v. Highland Construction Management Services, L.P. et al., Nos. 18-2450-52 (4th Cir. March 17, 2020), the Fourth Circuit Court of Appeals recently upheld that a borrower’s indirect economic interests in a limited liability company (LLC) were not assigned to a lender under a conveyance in a security agreement assigning mere membership interests, pursuant to Virginia state law.

Facts