Bloomberg reported last month that the Madoff bankruptcy has one more big case to go, chasing USD3.2b held by foreign banks (see our related story above). Mr Picard, the bankruptcy trustee, has reportedly recovered over USD14b of the USD17.5b in losses arising from Madoff's Ponzi scheme.

On 10 October 2019 the Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, announced an upcoming inquiry into insolvency practices. The inquiry was announced in light of rising concerns as to the efficacy of the voluntary administration process for SMEs and family-owned businesses, and concerns with the conduct of insolvency practitioners more generally.

The Ministry of Business, Innovation and Employment has published a Cabinet Paper outlining proposed reforms to New Zealand's insolvency laws to take account of certain recommendations made in the second report of the Insolvency Working Group from May 2017.

In Short

The Situation: Should liquidators be removed under section 90-15 of the Insolvency Practice Schedule (Corporations) in circumstances where they engaged in preappointment discussions with a secured creditor, allegedly failed to investigate the company's affairs promptly, and retained the company's preappointment solicitors?

In Short

The Situation: A liquidator can reject a "double proof" for what is, in substance, the same debt as another accepted proof of debt.

The Question: When are liquidators justified in rejecting what could arguably be a double proof?

The Federal Court of Australia rules that receivers appointed to a company in liquidation are entitled to pay employee entitlements and fees.

In Short

The Situation: Section 553C of the Corporations Act 2001 (WA) ("Act")provides that if a creditor and a company in liquidation have mutual dealings, the creditor must offset any sum the creditor owes to the company in liquidation against debt owed by the company.

The Question: Does the existence of a third party security interest over circulating assets (floating charge) which are intended to be set off against other debts prevent the dealings from being "mutual"?

In Short

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

The Question: Are holding DOCAs valid under the Corporations Act 2001(Cth)?

On various occasions during the periods 2012 to 2018, Shane Warner Builders Limited (SWBL) regularly failed to pay GST and PAYE to the Commissioner of Inland Revenue.

In January 2018 the Commissioner filed an application to put SWBL into liquidation.  The proceeding was adjourned in March 2018 whilst the Commissioner and Applicant engaged in negotiations for relief which ultimately failed due to SWBL's history of failures to pay tax arrears and failing to provide substantive supporting evidence regarding the source of funds required to settle current tax arrears. 

North Harbour Motors Limited (in liquidation) (North Harbour) issued a statutory demand against Moffat Road Limited (Moffat) in respect of two separate $30,000 deposits paid by North Harbour to Moffat on the purchase of two properties pursuant to agreements for sale and purchase dated 6 July 2015 (the Agreements).