In a recent case, the Victorian Supreme Court said that an accountant ‘would know well that a statutory demand involves strict time frames for response and potentially very significant consequences for a company’. The accountant failed to take appropriate steps to inform the company of the statutory demand.

The statutory demand process

If a company does not comply with a statutory demand within 21 days of service, it is deemed to be insolvent and the creditor may proceed to wind up the company.

A recent court decision considers the legal principles and sufficiency of evidence when a court-appointed receiver seeks approval of their remuneration.

A court-appointed receiver needs court approval for the payment of their remuneration. The receiver has the onus of establishing the reasonableness of the work performed and of the remuneration sought.

For a foreign decree to be recognisable in Switzerland, it is according to the Swiss International Private Law Act, required that the foreign bankruptcy decree is enforceable in the state where it was issued, and there must not be any grounds for refusing recognition, e.g. a violation of Swiss public policy. Furthermore, the decision must have been issued either in the state where the debtor has its seat or domicile or in the state where the debtor has its centre of main interests.

If bankruptcy proceedings are commenced against a debtor or if a debtor enters into a court-approved composition agreement with an assignment of all of its assets, transactions executed by the debtor during the last five years are subject to scrutiny.

The purpose of claw back claims is to recover assets extracted from or given away by an insolvent debtor for the benefit of its insolvency estate and ultimately its creditors. Transactions may be subject to claw back actions if:

1.1 Are there international treaties and/or cross-border instruments applicable?

The restructuring Q&A provides a comprehensive overview of some of the key points of law and practice of restructuring in Switzerland.

1.1 What formal insolvency proceedings are available in Switzerland? 

A Supreme Court in Australia has dismissed an application by a UK company’s moratorium restructuring practitioners for recognition of a UK moratorium and ordered that the company be wound up under Australian law.

The decision provides insights into the interaction between cross-border insolvencies and the winding up in Australia of foreign companies under Australian law.

Introduction

In the matter of Hydrodec Group Plc [2021] NSWSC 755, delivered 24 June 2021, the New South Wales Supreme Court:

It is possible for a trustee in bankruptcy to make a claim to property held by a bankrupt on trust. For example, by lodging a caveat over a home that is held on trust.

A trustee in bankruptcy may be able to make a claim, relying on the bankrupt’s right of indemnity as trustee of the trust. This is because the bankrupt’s right of indemnity, as trustee, is itself property that vests in the trustee in bankruptcy under the Bankruptcy Act 1966.

Explaining a trustee’s right of indemnity

A 139ZQ notice issued by the Official Receiver is a powerful tool for trustees in bankruptcy seeking to recover a benefit received by a third party from an alleged void transaction. These include transactions such as an unfair preference, an undervalued transaction, or a transaction to defeat creditors.

Given the adverse consequences for noncompliance, a recipient of a 139ZQ notice should take it seriously and obtain legal advice without delay.

Section 139ZQ notices

On 19 June 2020, following the consultation, the Federal Council adopted the dispatch on the partial revision of the Swiss Federal Banking Act (Bundesgesetz über die Banken und Sparkassen, Bankengesetz). The legislative amendment intends to strengthen customer and depositor protection and promote system stability.

The partial revision focuses on three main areas: (i) the restructuring proceedings for banks, (ii) deposit insurances and (iii) intermediated securities.