It is not uncommon for contractors, in several industry sectors, to contract with a special purpose vehicle (SPV), whose day-to-day management is effectively controlled by a parent company, and the SPV has with little to no assets beyond cash flow provided by its parent. In this article we look at what a claimant could do outside of the traditional insolvency process in circumstances where the SPV goes into a form of external administration such as administration or liquidation and there are no assets available to the external administrators.

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.

In the recent decision of Re PBS Building (Qld) Pty Ltd [2024] QSC 108, the Supreme Court of Queensland considered for the first time the operation of the State’s new project and retention trust account regime in the context of an insolvency. The decision provides useful guidance to insolvency practitioners and subcontractors as to their rights in relation to trust accounts established by an insolvent head contractor.

The Employment (Collective Redundancies and Miscellaneous Provisions) Act 2024 has been signed into law. The Act, once commenced, will amend the existing collective redundancy regime in insolvency situations and will deliver on key Programme for Government commitments detailed in the Plan of Action – Collective Redundancies following Insolvency.

Background

The Employment (Collective Redundancies and Miscellaneous Provisions) and Companies (Amendment) Act 2024 has been signed into law. The text of the Act remains unchanged from when we published a briefing on the Bill in December here.

At A Glance

The Employment (Collective Redundancies and Miscellaneous Provisions) and Companies (Amendment) Bill 2023 (the “Bill”) proposes amendments to the existing collective redundancy regime in insolvency situations. If enacted, the Bill will deliver on key Programme for Government commitments detailed in the Plan of Action – Collective Redundancies following Insolvency.

A recently published Bill proposes amendments to the existing collective redundancy regime in insolvency situations. If enacted, the Bill will deliver on key Programme for Government commitments detailed in the Plan of Action – Collective Redundancies following Insolvency.

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?

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.