Will a Court order security for costs against a liquidator with litigation funding? Not always, as a recent decision of the NSW Supreme Court made clear.

Background

The defendant was the director of a company (Commercial Indemnity Pty Ltd or ‘Commercial Indemnity’) which provided agency services for commercial and industrial rental and petroleum bonds.

This week’s TGIF considers a recent insolvent trading claim involving novel questions in relation to privilege against self-incrimination and the apportionment of liability between successive directors.

Background

This week’s TGIF considers the decision of AIG Australia Limited v Kaboko Mining Limited [2019] FCAFC 96, in which the Full Federal Court found that an insolvency exclusion in a D&O policy did not apply to exclude claims brought against directors and officers of a company under external administration.

What happened?

On May 17, 2019, the Bankruptcy Court for the Southern District of New York announced that the Official Committee of Consumer Creditors (the “Consumer Committee”) appointed in the In re Ditech Holding Corp. bankruptcy case would not be disbanded. Ditech, supported by the ad hoc group of term loan lenders (the “Ad Hoc Group”), had filed a motion requesting that the Consumer Committee be disbanded or alternatively have a limited scope and budget. After receiving objections from the U.S.

This week’s TGIF considers Re GGA Lifestyle Pty Ltd (Administrators Appointed); Ex Parte Woodhouse [2019] WASC 167, where the Supreme Court of Western Australia clarified that a voluntary administrator of a company in administration is able to claim costs of care, preservation and realisation of partnership assets of the company in administration through an equitable lien in the same way liquidators can.

What happened?

This week’s TGIF considers the recent case of Halifax Investment Services Pty Ltd (In liquidation) (No 4) [2019] FCA 604 where the Federal Court granted an application by liquidators of a company to electronically publish notices required to be sent to creditors as part of their initial reporting obligations in a winding up, to save costs and time, in cir

The introduction of a safe harbour protection for company directors was one of a number of generational reforms to the restructuring landscape throughout late 2017 and 2018 aimed at relaxing Australia’s unforgiving insolvency laws.

Now that more than a year has passed, have the safe harbour reforms been a success? And what steps can directors take to ensure they obtain the protections they afford?

This week’s TGIF considers the decision in Erskine as liquidator of North Shore Property Developments Pty Ltd (in liq) v 72-74 Gordon Crescent Lane Cove Pty Ltd [2019] FCAFC 62, where a determination was upheld that Courts should not go behind a deed of release entered into by a liquidator without a valid basis for doing so.

Last month, Congress reintroduced the Small Business Reorganization Act (“SBRA”), under which a new subchapter V would be added to chapter 11 of the United States Bankruptcy Code. This new subchapter would provide small businesses with aggregate liabilities that do not exceed $2,566,050 with an opportunity to resolve outstanding liabilities through a streamlined and cost‑effective chapter 11 bankruptcy proceeding.

This week’s TGIF considers a recent decision of the Victorian Court of Appeal where a company’s creditors successfully opposed an application by the company’s liquidators to compromise proceedings commenced on the company’s behalf.