BACKGROUND

Mr Featherstone was recorded as director of Ashala Pty Ltd (Ashala) from 10 March 2004 to 7 October 2005 and from 28 November 2005 to 12 December 2005. Ashala occupied premises which Mr Featherstone owned as trustee for his family trust.

On 7 October 2005, Mr Featherstone agreed to transfer his shares in Ashala and two other related companies to Ms Kristy Marks and for Ms Marks to become the sole director of the three companies. This agreement was recorded in an “agreement letter” and ASIC was notified accordingly.

Debt-for-equity swaps and debt exchanges are common features of out-of-court as well as chapter 11 restructurings. For publicly traded securities, out-of-court restructurings in the form of "exchange offers" or "tender offers" are, absent an exemption, subject to the rules governing an issuance of new securities under the Securities Exchange Act of 1933 (the "SEA") as well as the SEA tender offer rules.

Compared to much of the rest of the world, the United States had the most positive economic, business, and financial news in 2014.

The Federal Court has recently handed down a decision that clarifies the power of receivers to administer trust property under a debenture. In Benton, in the matter of Mackay Rural Pty Ltd (Receivers and Managers Appointed) [2014] FCA 1285, the Federal Court confirmed that section 420 of the Corporations Act 2001 (“the Act”) confers upon receivers a power to dispose of trust property, provided that this is necessary for the purpose for which they have been appointed.

FACTS

After a creditor or equity security holder casts its vote to accept or reject a chapter 11 plan, the vote can be changed or withdrawn "for cause shown" in accordance with Rule 3018(a) of the Federal Rules of Bankruptcy Procedure ("Rule 3018(a)"). However, "cause" is not defined in Rule 3018(a), and relatively few courts have addressed the meaning of the term in this context in reported decisions.

The Supreme Court of Western Australia recently handed down its decision in Soil and Contracting Pty Ltd v Boban Pty Ltd [2014] WASC 402 which confirmed that, notwithstanding the operation of s 459R of the Corporations Act, the slip rule is available to extend the time limit within which a winding up application may be determined.

SECTION 459R

Connections Total Fitness for the Family Pty Limited (Connections) operated a gym on premises owned by Selkirk Pastoral Co Pty Limited (Selkirk). The gym business ultimately failed and ceased trading when administrators were appointed on 4 October 2013. Connections’ assets were limited to some cash at bank and a $1.1m claim against Selkirk.

The respondent in this matter, Mr Culleton, owed Macquarie Leasing Pty Limited (Macquarie) a debt arising out of two chattel mortgage agreements.

Macquarie obtained judgment against Mr Culleton in the amount of $94,304. The judgment debt was not paid and Macquarie petitioned for a sequestration order to be made against Mr Culleton’s estate.

Macquarie served the Bankruptcy Notice on Mr Culleton by affixing it to a padlocked gate at his last known address.

FACTS

InKitay, in the matter of South West Kitchens (WA) Pty Ltd [2014] FCA 670, Mr Kitay was appointed liquidator of South West Kitchens (WA) Pty Ltd (SW Kitchens) by voluntary winding up. SW Kitchens was trustee of a trust and owned all its assets as trustee of that trust. The trust deed provided that SW Kitchens was disqualified from acting as trustee if it was wound up.

In Rathner in his capacity as Official Liquidator of Kalimand Pty Ltd (in liq) v Hawthorn [2014] FCA 1067, the Federal Court considered the elements of voidable transactions under Pt 5.7B of the Corporations Act, and the meaning of becoming insolvent “because of” entering into a transaction.