Introduction

Fixed and floating charges – why are they important?

They give a lender a higher position in the queue for the net proceeds of a borrower’s assets in the event of a borrower’s insolvency.

Before 1993, the question of whether a creditor of a corporation being wound up had received an unfair preference from that corporation was determined under section 122 of the Bankruptcy Act 1966 (Cth). In 1993, a new Part 5.7B was inserted into the Corporations Act to deal with voidable transactions such as unfair preferences. Since then two lines of divergent judicial authority have developed:

Summary

In an exciting week for insolvency, the Minister for Financial Services, Superannuation and Corporate Law has released a package of reforms to Australia’s corporate insolvency laws. This reform package includes: