IE CA 3 Holdings Ltd and IE CA 4 Holdings Ltd (Companies) were two Canadian registered companies whose directors were located outside of Canada. The Companies’ parent company, Iris Energy Limited (Iris), was listed on NASDAQ and had its registered office in Melbourne and principal place of business in Sydney, with three of its six directors located in New South Wales.

In Morgan v McMillan Investment Holdings Pty Ltd [2024] HCA 33, the High Court had to consider whether a right to sue held by companies in liquidation could provide the required gateway for a pooling order under s 579E(1) of the Corporations Act 2001 (Cth).

Key Takeaways

Categorisation of a charge as fixed or floating will have a significant impact on how assets are dealt with on insolvency and creditor outcomes.

Typical fixed charge assets include land, property, shares, plant and machinery, intellectual property such as copyrights, patents and trademarks and goodwill.

Typical floating charge assets include stock and inventory, trade debtors, cash and currency, movable plant and machinery (such as vehicles), and raw materials and other consumable items used by the business.

In In the matter of Academy Construction & Development Pty Ltd (subject to Deed of Company Arrangement) [2024] NSWSC 808, the New South Wales Supreme Court had to determine whether to terminate a Deed of Company Arrangement (DOCA) on the basis that it was oppressive, unfairly prejudicial or discriminatory.

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.

The Supreme Court of Western Australia has recently delivered judgment in the case of Kitay v Frigger [No 2] [2024] WASC 113. The Court held that some, but not all, long-term costs agreements and retainers entered into by a liquidator required court approval.

Key Takeaways

The Federal Court has recently delivered judgment in the case of Cooper as Liquidator of Runtong Investment and Development Pty Ltd (In Liq)v CEG Direct Securities Pty Ltd [2024] FCA 6, a case where a liquidator was successful in having a mortgage declared as an unreasonable director-related transaction.

Key Takeaways

Changes are afoot to the statutory regime governing special administrations for regulated water companies (the SAR) following the publication of a suite of new legislation.

Impact of the changes on pension trustees

In this week’s TGIF, we examine the recent case of Re Eliana Construction and Developing Group Pty Ltd [2023] VSC 639 which considers guarantor subrogation rights in insolvency scenarios.

Key takeaways

A thorny question facing a company when considering a Restructuring Plan is how to deal with HMRC particularly following HMRC’s opposition to recent plans.

Creditors now have some assistance in these deliberations thanks toguidance published by HMRC setting out how they will approach discussions with companies considering a Restructuring Plan.