On April 5 and June 8, 2017, the U.S. House of Representatives passed bills (the Financial Institution Bankruptcy Act of 2017 ("FIBA") and the Financial CHOICE Act of 2017) that would allow financial institutions to seek protection under Chapter 11 of the Bankruptcy Code.
This week’s TGIF considers Bunnings Group Ltd v Hanson Construction Materials Pty Ltd & Anor [2017] WASC 132, where the Court considered whether the order of registration of caveats determined the priority of competing unregistered charges.
BACKGROUND
Bunnings and Hanson each supplied building materials to Capital Works prior to Capital Works’ liquidation by means of a creditors’ voluntary winding up.
Creation of the charges
This week’s TGIF considers the recent proposals to crackdown on rogue directors and reduce the burden on FEG to pay unpaid workers.
A last resort – but for who?
On 17 May 2017, the Federal Government published a consultation paper inviting submissions on options for law reform to address corporate misuse of the Fair Entitlements Guarantee (‘FEG’) scheme.
In bankruptcy cases under chapter 11, debtors sometimes opt for a "structured dismissal" when a consensual plan of reorganization or liquidation cannot be reached or conversion to chapter 7 would be too costly. In Czyzewski v. Jevic Holding Corp., 137 S. Ct. 973, 2017 BL 89680 (U.S. Mar. 27, 2017), the U.S. Supreme Court held that the Bankruptcy Code does not allow bankruptcy courts to approve distributions in structured dismissals which violate the Bankruptcy Code's ordinary priority rules.
This week’s TGIF considers the case of In the matter of Boart Longyear Limited [2017] NSWSC 537 in which the NSW Supreme Court made orders to assist with the restructuring of a group of companies to the ultimate benefit of creditors.
BACKGROUND
A group of companies in financial difficulty sought the Court’s approval of two interdependent creditors’ schemes of arrangement which would effect a restructuring of the group’s financial affairs. The group had operations both in Australia and the US.
This week’s TGIF considers Linc Energy Ltd (in Liq) v Chief Executive Dept of Environment & Heritage Protection [2017] QSC 53, in which the Queensland Supreme Court directed that the liquidators of Linc Energy were not justified in causing it to fail to comply with an environmental protection order
BACKGROUND
This week’s TGIF considers an objection by directors and related-party creditors to a liquidator retaining solicitors who had previously acted for a substantial creditor in proceedings against the company.
What happened?
On 15 August 2016, a statutory demand was issued to the operator of a Chinese dumpling restaurant. The restaurant operator failed to comply with the demand and was wound up by order of the Court. The petitioning creditor also obtained orders for the appointment of a liquidator to the restaurant operator.
On May 1, 2017, the U.S. Supreme Court agreed to hear Merit Management Group v. FTI Consulting, No. 16-784, on appeal from the U.S. Court of Appeals from the Seventh Circuit. The Court's decision could resolve a circuit split as to whether section 546(e) of the Bankruptcy Code can shield from fraudulent conveyance attack transfers made through financial institutions where such financial institutions are merely "conduits" in the relevant transaction.
On May 1, 2017, the U.S. Supreme Court agreed to hear Merit Management Group v. FTI Consulting, No. 16-784, on appeal from the U.S. Court of Appeals from the Seventh Circuit. See FTI Consulting, Inc. v. Merit Management Group, LP, 830 F.3d 690 (7th Cir. 2016) (a discussion of the Seventh Circuit's ruling is available here).
This week’s TGIF considers a recent Federal Court decision in which relief was sought under section 588FM of the Corporations Act to ensure a security interest perfected after the ‘critical time’ did not automatically vest.
What happened?
On 7 April 2016, administrators were appointed to OneSteel. OneSteel, a member of the Arrium Group of Companies, subsequently entered into a deed of company arrangement.