This week’s TGIF considers a recent decision of the Supreme Court of New South Wales (Forex Capital Trading Pty Ltd (in liquidation) v Invesus Group Limited [2024] NSWSC 867). Justice Ball determined that admission of a proof of debt by a liquidator was not akin to a judgment or settlement, and that such an admission did not create a new liability of the company.
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.
Following the recent conflicting decisions in HQP Corporation (in official liquidation)1(HQP) and Direct Lending Income Feeder Fund, Ltd (in official liquidation)2 (DLI), Simon Dickson and Laura Stone of Mourant Ozannes (Cayman) LLP consider whether shareholder misrepresentation claims can be admitted in a Cayman Islands liquidation.
The Grand Court has allowed the appointment of a Provisional Liquidator under section 104(3) of the Companies Act (2023 Revision) (the Act) for the purpose of facilitating a restructuring, rather than using the tailor-made Restructuring Officer provisions under section 91(B) of the Act.
Background
In a recent decision of the Supreme Court of New South Wales (In the matter of Pacific Plumbing Group Pty Limited (in liquidation) [2024] NSWSC 525), Justice Black determined that a payment made by a third party was not an unfair preference because the payment did not diminish assets available to creditors.
Key Takeaways
The Grand Court confirms that the Court has the jurisdiction to appoint an alternative voluntary liquidator in place of a Liquidating Agent under a limited partnership agreement.
Background
Many will have waited for a bus only for two to come along at once. So it is in the Cayman Islands, with the ongoing saga as to whether a shareholder can make a claim for misrepresentation in a liquidation and, if so, where such a claim ranks in the order of priority. The rule in Houldsworth barring such claims has been in existence for over 140 years. However, two liquidations have, within weeks of each other, sought to overturn this longstanding rule.
The Federal Court in Morgan, in the matter of Traditional Values Management Limited (in liq)[2024] FCA 74, approved an abridged process that allowed the liquidator to admit debts of a group of unsecured creditors without requiring a formal proof of debt.
Key Takeaways
In the Matter of Holt Fund SPC (Unreported, 26 January 2024) is the first occasion where an application has been made to appoint Restructuring Officers over portfolios of a segregated portfolio company. At first glance the judgment appears uncontroversial. However, it highlights a lacuna in the law which readers should be aware of.
Background
The Petitioner sought the appointment of Restructuring Officers (ROs) in respect of two segregated portfolios of the Holt Fund SPC.
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.