This week’s TGIF considers a recent decision of the High Court of Australia, in which a 4:3 majority held that a former trustee is not owed any fiduciary obligation by a successor trustee.

Key takeaways

In Davis-Jacenko v Roxy’s Bootcamp Pty Limited [2024] NSWSC 702, McGrath J delivered an extempore decision, appointing provisional liquidators in respect of Roxy’s Bootcamp Pty Limited (theCompany). His Honour stated that it was “a paradigm case” for the court to intervene to preserve the status quo.

Key Takeaways

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.

When do amounts owed to a company constitute ‘circulating assets’ and how should they be distributed? This crucial question has not always been answered predictably in recent cases. The Court of Appeal’s decision in Resilient Investment Group Pty Ltd v Barnet and Hodgkinson as liquidators of Spitfire Corporation Limited (in liq) [2023] NSWCA 118 has provided a framework for navigating the relevant principles in the context of a priority dispute over R&D tax refunds.

Key takeaways

The Supreme Court of Canada's ("SCC") recent decision in Peace River Hydro Partners v.

Introduction

What happens when a shady businessman transfers $1 million from one floundering car dealership to another via the bank account of an innocent immigrant? Will the first dealership’s future chapter 7 trustee be allowed to recover from the naïve newcomer as the “initial transferee” of a fraudulent transfer as per the strict letter of the law? Or will our brave courts of equity exercise their powers to prevent a most grave injustice?

It is common for construction project owners to finance projects through multiple mortgages, especially in times of rising construction costs. However, when an insolvency situation arises, holdback priority claims from contractors and subcontractors are particularly complex when there are multiple building mortgages involved. The Ontario Superior Court (Commercial List) provided new clarity in this regard in its April 29, 2022 decision in BCIMC Construction Fund Corp. et al.

Understanding limitation periods are of crucial importance in the construction industry, particularly when a contractor is faced with unpaid invoices for services or materials rendered. The Ontario Court of Appeal stepped back into the spotlight in this regard with its decision in Thermal Exchange Service Inc. v Metropolitan Toronto Condominium Corporation No. 1289, 2022 ONCA 186, in holding that a defendant's assurances may prolong the "discoverability" of a claim for non-payment.

Background

A foreign (non-U.S.) company can be dragged unwillingly into a U.S. bankruptcy case if the bankruptcy court has “personal jurisdiction” over the company.