The Federal Court of Australia has recently delivered judgment in the case of Deputy Commissioner of Taxation v ACN 152 259 839 Pty Ltd [2024] FCA 1489. The Court held that in some circumstances, a statutory demand can be validly served on a perceived temporarily empty company office.
On 20 May 2024, an ATO officer purported to serve ACN 152 259 839 Pty Ltd (the Company) with a statutory demand and an accompanying affidavit by leaving the documents at the Company’s registered office.
The Federal Court in Hema Maps Pty Ltd v HemaX Digital Pty Ltd, in the matter of HemaX Digital Pty Ltd [2024] FCA 1127, appointed a provisional liquidator to preserve the status quo until the determination of a winding up application. This winding up application was due to a deadlock and an irreparable breakdown in relations between shareholders, and mismanagement of the company.
Key Takeaways
We recently blogged (here) about the Privy Council decision of Sian Participation Corporation (In Liquidation) v Halimeda InternationalLtd [2024] UKPC 16 (
In Harrington v. Purdue Pharma LP, in a 5-4 decision, the Supreme Court held that the Bankruptcy Code does not authorize bankruptcy courts to confirm a Chapter 11 bankruptcy plan that discharges creditors’ claims against third parties without the consent of the affected claimants. The decision rejects the bankruptcy plan of Purdue Pharma, which had released members of the Sackler family from liability for their role in the opioid crisis. Justice Gorsuch wrote the majority decision. Justice Kavanaugh dissented, joined by Chief Justice Roberts and Justices Kagan and Sotomayor.
Can a creditor obtain a winding up order against a debtor company if the underlying dispute over the debt is subject to an arbitration agreement between the parties?
Where a winding up petition is based on a debt arising from a contract with a non-Hong Kong exclusive jurisdiction clause, the court will tend to dismiss or stay the winding up petition in favour of the parties’ agreed forum unless there are strong countervailing factors.
In the matter of Bleecker Property Group Pty Ltd (In Liquidation) [2023] NSWSC 1071, appears to be the first published case that considers the question of whether an order can be made under section 588FF(1)(a) of the Corporations Act 2001 (Cth) by way of default judgment against one defendant where there are multiple defendants in the proceedings.
Key takeaways
In the current economic climate, more and more companies are getting into financial difficulties, informal workouts by debtor companies, with support from certain creditors, seem to be increasingly common.
When a company is in the so-called “twilight zone” approaching insolvency, it is well-established that the directors’ fiduciary duties require them to take into account interest of creditors (the so-called “creditor duty”).