The bankruptcy court presiding over the FTX Trading bankruptcy last month issued a memorandum opinion addressing valuation of cryptocurrency-based claims and how to “calculate a reasonable discount to be applied to the Petition Date market price” for certain cryptocurrency tokens.
Who owns cryptocurrency held by a cryptocurrency exchange? Do the cryptocurrency assets belong to the customers who deposited the crypto with the exchange, or do the cryptocurrency assets belong to the exchange itself? The answer to this question will have huge significance, both in terms of creditor recoveries as well as preferential transfer liability exposure.
In this second part of our blog exploring the various issues courts need to address in applying the Bankruptcy Code to cryptocurrency, we expand upon our roadmap.
Many authorities and commentators have considered cryptocurrencies, and the blockchains that undergird them, as a potentially disruptive force in the financial industry. Now, that disruption has made its way to a different side of finance—bankruptcy, and during the past year, the United States bankruptcy courts have had to confront many unexpected challenges involved in dealing with cryptocurrency.
How close is too close? The answer to this question can have dire implications for people and companies involved in the cannabis industry who wish to seek bankruptcy protection.
In this week’s TGIF, we consider the recent case of Vita Group Ltd, in the matter of Vita Group Ltd [2023] FCA 400, in which his Honour Justice Jackman outlined practical changes to the way schemes of arrangement should be implemented through the Federal Court to make them simpler, faster and more cost efficient.
Key takeaways
In this week’s TGIF, we consider the Federal Court’s recent decision inFotios (Bankrupt) v Helios Corporation Pty Ltd (No 3) [2023] FCA 251, and earlier decisions in the same proceedings, clarifying the current Australian position as to priorities between creditors of successive trustees.
Key takeaways
In Re Brew Still Pty Ltd (admin apptd)[2023] NSWSC 256, Black J of the New South Wales Supreme Court declined an application for an adjournment of one month brought by the voluntary administrator appointed to Brew Still Pty Ltd three days prior to the hearing of the winding up application.
The decisions in Metal Manufactures Pty Limited v Morton [2023] HCA 1 and Bryant v Badenoch Integrated Logging Pty Ltd [2023] HCA 2 have been viewed as conflicting for liquidators. In this week’s TGIF, we examine these proceedings and why the decisions benefit both liquidators and creditors.
Key takeaways
In Lawrence, Ozifin Tech Pty Ltd (in liq) v AGM Markets Pty Ltd (in liq)[2022] FCA 1478, liquidators of multiple companies were successful in obtaining the declarations and directions they sought regarding the distribution of statutory trust funds, and obtaining payment of their fees from trust assets.