"Comity" is a principle of jurisprudence whereby, under appropriate circumstances, one country recognizes within its borders the legislative, executive, or judicial acts of another nation. Many recent court rulings have examined the indispensable role of comity in the context of foreign bankruptcy or insolvency proceedings that have been "recognized" by U.S. courts during the two decades since the enactment of chapter 15 of the Bankruptcy Code. However, U.S.

The Singapore International Commercial Court ("SICC") has handed down its first insolvency-related ruling. The court granted recognition and full force and effect to Indonesia's flagship airline's restructuring plan. That plan had been approved in accordance with Indonesian law. In granting recognition to the Indonesian plan under Singapore's version of the UNCITRAL Model Law on Cross-Border Insolvency, the SICC overruled objections to recognition from aircraft lessors.

Established in 2015 as a trusted neutral forum to meet increasing demand for effective transnational dispute resolution, the Singapore International Commercial Court (the "SICC") is a division of the General Division of the High Court and part of the Supreme Court of Singapore. On January 18, 2024, the SICC handed down its first insolvency-related ruling.

In Short

The Situation: Historically, creditors pursued by liquidators under the unfair preference regime could rely on a statutory set-off as a defence to the claim, reducing or eliminating their liability to repay what would otherwise be preference payments, on the basis that the liability for the unfair preference payment formed part of a running account between the creditor and the company.

In Short

The Situation: The High Court of Australia has confirmed in Bryant v Badenoch Integrated Logging Pty Ltd [2023] HCA 2 that the "peak indebtedness rule" is no longer available to liquidators when assessing the value of running accounts in unfair preference claims.

In Short

The Situation: Insolvency officeholders increasingly find their investigations into a company's affairs frustrated by the comingling of records on a "group" server. Claims to privilege by other group entities (or even third parties) are then advanced as an obstacle to delivering company records to the officeholder, leading to expensive and logistically complex inspection and review processes that can be a burden on insolvent estates.

In Short

The Situation: In February 2020, amendments to the Corporations Act 2001 (Cth) expanded the kinds of transactions that may be voidable if a company is being wound up to include asset disposals undertaken as part of illegal phoenixing schemes. Such disposals are termed as "creditor-defeating dispositions" in the legislation.

In Short

The Situation: In the recent decision of Morton as Liquidator of MJ Woodman Electrical Contractors Pty Ltd v Metal Manufacturers Pty Limited [2021] FCAFC 228, the Full Court of the Federal Court of Australia considered the availability of mutual set-off provisions in s 553C the Corporations Act 2001 (Cth) as a defence to unfair preference claims.

In Short

In Short

The Situation: The Full Court of the Federal Court has changed industry practice in Badenoch Integrated Logging Pty Ltd v Bryant, in the matter of Gunns Limited (in liq) (receivers and managers appointed) [2021] FCAFC 64 by holding that the "peak indebtedness rule" is not available to liquidators when assessing the value of running accounts in unfair preference claims.