In my most recent blog post, I provided some tips for creditors who find themselves in the Subchapter V arena. This is somewhat of a follow-up to that one.

The overwhelming majority of my practice has involved larger, complex Chapter 11 cases and out-of-court restructurings, and representing debtors, Chapter 11 trustees, committees or creditors.

When Subchapter V came to be in 2019 under the Small Business Reorganization Act, I honestly did not think that I would have the opportunity to participate in those types of cases due to the debt limitations imposed by statute.

The overwhelming majority of my practice has involved larger, complex Chapter 11 cases and out-of-court restructurings, representing debtors, Chapter 11 trustees, committees, or creditors. However, with the expansion during Covid of the Subchapter V debt limit to $7.5 million, I have found myself participating in multiple Subchapter V cases as counsel to creditors. I discovered quickly that habits developed in larger Chapter 11 cases do not necessarily translate to Subchapter V.

When a debtor receives a bankruptcy discharge, section 524(a) of the U.S. Bankruptcy Code prohibits a creditor from seeking to collect a prepetition debt against the discharged debtor or its property. Importantly, the discharge does not extinguish the debt—it merely limits recourse against the discharged debtor. Section 524(e), however, provides that the discharge does not affect the liability of non-debtors for the discharged debt.

This week’s TGIF considers a recent case where the Supreme Court of Queensland rejected a director’s application to access an executory contract of sale entered into by receivers and managers on the basis it was not a ‘financial record’

Key Takeaways

This week’s TGIF looks at the decision of the Federal Court of Australia in Donoghue v Russells (A Firm)[2021] FCA 798 in which Mr Donoghue appealed a decision to make a sequestration order which was premised on him ‘carrying on business in Australia' for the purpose of section 43(1)(b)(iii) of the Bankruptcy Act 1966 (Cth) (Act).

Key Takeaways

This week’s TGIF considers an application to the Federal Court for the private hearing of a public examination where separate criminal proceedings were also on foot.

Key takeaways

This week’s TGIF looks at a recent decision of the Victorian Supreme Court, where a winding up application was adjourned to allow the debtor company to pursue restructuring under the recently introduced small business restructuring reforms.

Key takeaways

This week’s TGIF takes a look at the recent case of Mills Oakley (a partnership) v Asset HQ Australia Pty Ltd [2019] VSC 98, where the Supreme Court of Victoria found the statutory presumption of insolvency did not arise as there had not been effective service of a statutory demand due to a typographical error in the postal address.

What happened?

This week’s TGIF examines a decision of the Victorian Supreme Court which found that several proofs had been wrongly admitted or rejected, and had correct decisions been made, the company would not have been put into liquidation.

BACKGROUND