The Federal Court of Australia has provided judicial guidance about what constitutes taking possession by seizure under the Personal Property Securities Act 2009 (Cth) ("PPSA"). Knauf Plasterboard Pty Ltd v Plasterboard West Pty Ltd (In Liquidation) (Receivers and Managers Appointed) [2017] FCA 866 indicates that a receiver taking possession of personal property in accordance with a valid security agreement will not perfect a security interest by way of possession.

Background

In Short

The Situation: Frequently, the statutory moratorium period provided to voluntary administrators to restructure an insolvent company is too short to find a solution. Administrators often utilise "holding" deeds of company arrangement to extend the period of moratorium and "buy" time to investigate potential restructuring opportunities for the future of the company. A creditor recently challenged this industrywide practice by arguing that holding DOCAs are invalid.

Background

On 7 December 2015, the Australian Government released its "National Innovation and Science Agenda" ("Agenda"). In the Agenda, the Government outlined its intention to make three significant reforms to Australia's insolvency laws, adopting the recommendations of the Productivity Commission ("Commission") in its report, "Business Set-Up, Transfer and Closure" ("Report"), released on the same day as the Agenda:

On December 5, 2013, Judge Steven Rhodes of the US Bankruptcy Court for the Eastern District of Michigan held that the city of Detroit had satisfied the five expressly delineated eligibility requirements for filing under Chapter 9 of the US Bankruptcy Code¹ and so could proceed with its bankruptcy case.

On May 15, 2012, the Eleventh Circuit Court of Appeals (the “Circuit Court”) issued an opinion in In re TOUSA, Inc.,¹ in which it affirmed the original decision of the bankruptcy court and reversed the appellate decision of the district court. After a 13-day trial, the bankruptcy court had found that liens granted by certain TOUSA subsidiaries (the “Conveying Subsidiaries”) to secure new loans (the “New Term Loans”) incurred to pay off preexisting indebtedness to certain lenders (the “Transeastern Lenders”) were avoidable fraudulent transfers.

Introduction

The recent bankruptcy filings by infrastructure companies Connector 2000 Association Inc., South Bay Expressway, L.P., California Transportation Ventures, Inc., and the Las Vegas Monorail Company have tested the structures utilized to implement public-private partnerships (P3s) in the United States in several respects. It is still too early to draw definitive conclusions about the impact of these proceedings on P3 structures going forward, but initial rulings in two of the cases are already focusing the minds of project participants on threshold structuring considerations.

In a decision that reaffirms its previous rulings on the jurisdictional limits of bankruptcy courts, the US Court of Appeals for the Third Circuit recently held in W.R. Grace & Co. v. Chakarian (In re W.R. Grace & Co.)1 that bankruptcy courts lack subject matter jurisdiction over third-party actions against non-debtors if such actions could affect a debtor’s bankruptcy estate only following the filing of another lawsuit.

To promote equal treatment of creditors, the US Congress has armed debtors with the power to bring suit to recover a variety of pre-bankruptcy transfers. Prominent among these is a debtor’s ability under Section 548 of the Bankruptcy Code to recover constructively fraudulent transfers — i.e., transfers made without fair consideration when a debtor is insolvent.

To promote equal treatment of creditors, the US Congress has armed debtors with the power to bring suit to recover a variety of pre-bankruptcy transfers. Prominent among these is a debtor’s ability under Section 548 of the Bankruptcy Code to recover constructively fraudulent transfers — i.e., transfers made without fair consideration when a debtor is insolvent.