What a director wanting to enter the safe harbour must do
Directors in Australia have long had a statutory duty to prevent insolvent trading. The duty is engaged where:
British Steel has entered compulsory liquidation today with EY being appointed as special managers. Is British Steel the first real victim of Brexit? First, as a result of the delay in the UK’s divorce deal, the EU delayed granting carbon credits to British Steel necessitating a £120m loan from the government to stave off significant penalties in relation to its emissions targets.
In the recent UK case of Wright and others v HMV Ecommerce Limited and another [2019] EWCH 903, the Court considered whether an electronic filing (e-filing) of a notice of appointment of administrators by directors outside the court’s opening hours was valid.
Background
UNCITRAL has recently published its Model Law on Recognition and Enforcement of Insolvency-Related Judgments (MLREIJ), with a recommendation that nations adopt it into their domestic law. You can find a complete copy of the text of MLREIJ here (on the UNCITRAL website).
What you need to know
The Federal Court – in a much-litigated wider contest about the ownership of the luxury yacht, “Dragon Pearl” drifting in an intriguing cross-border insolvency – has clarified the limitations for foreign entities and their insolvency appointees in pursuing action in Australia to un-wind antecedent transactions (by attempting to use the voidable transaction provisions of the Australian Corporations Act).
Insolvency and restructuring professionals need to know:
What you need to know
The Federal Court – in a much-litigated wider contest about the ownership of the luxury yacht, "Dragon Pearl" drifting in an intriguing cross-border insolvency – has clarified the limitations for foreign entities and their insolvency appointees in pursuing action in Australia to un-wind antecedent transactions (by attempting to use the voidable transaction provisions of the Australian Corporations Act).
Insolvency and restructuring professionals need to know:
What you need to know
On 7 December 2018, amendments to the Australian Insolvency Practice Rules(Corporations) came into effect, which overhaul the manner in which assigned debts can be deployed in formal corporate insolvencies. These changes have the potential to significantly impact commonly used techniques for a solvent parent/group entity looking to control the formal insolvency of a subsidiary or affiliate.
What you need to know
The High Court has decided not to hear an appeal about the ability of the Linc Energy Limited (Linc Energy) liquidators to disclaim property of the company - this means the liquidators could disclaim that property, including any obligations under the specific environmental protection order (EPO) issued under Queensland's environmental legislation. The current position stands that the disclaimer notice had the effect of avoiding obligations of both the company and its liquidators under the EPO.
What you need to know
The High Court yesterday affirmed the flexibility of the purposes for Deeds of Company Arrangement (DOCA). In its reasoning, the Court placed very few limits on the use of what are commonly called "holding" DOCAs. It confirmed that a holding DOCA can be validly accepted by creditors to allow more time for an administrator to investigate the future options for an insolvent company.
On 26 August, the Government announced that it will be making changes to UK insolvency legislation. The changes are intended to support distressed companies and address issues highlighted by major company failures and include: