In Official Assignee v Carrim the High Court considered the concept of a "gift" in the Insolvency Act 2006.

The Official Assignee sought to cancel insolvent gifts made by the bankrupt to complete a property purchase by a family trust settled by the bankrupt and Ms Carrim, the bankrupt's partner (as trustees).  The High Court considered:

Arena Capital Limited (Arena) was a Ponzi scheme.  Arena's liquidators applied under s284(1)(a) of the Companies Act 1993 for directions regarding the distribution of assets under liquidation.

The Court held that dividing the assets into trust assets and general assets was inefficient in the circumstances and ordered a "common pool approach."  The Court ordered distribution on a pro rata, pari passu basis.  The investors had borne the same degree of risk and it was not cost-effective to trace the numerous small contributions.

In 2013, Mrs Hanara was adjudicated bankrupt.  The Assignee subsequently disclaimed Mrs Hanara's half-interest in a Hastings property (the Interest), in which Mrs Hanara had very little equity.  In 2016, the owner of the other half-share in the property, Mr Hanara, was also adjudicated bankrupt.  The Assignee, acting in respect of both bankrupt estates, looked again at the likely equity that might be available in the property.  The Assignee considered that, on its own, Mr Hanara's one half- share in the property would be unsaleable and therefore applied under s 119

The Commissioner of Inland Revenue (Commissioner) appealed a decision of Associate Judge Christiansen to approve a payment proposal by Mr Wilson to discharge a debt he owed the Commissioner and thereby avoid a declaration of bankruptcy. 

Last month the Insolvency Working Group released its second and final report, dealing with voidable transactions and Ponzi schemes.  The Group's first report was released in July 2016 and dealt with regulation of insolvency practitioners and voluntary liquidations.  In the second report, the Working Group make a number of recommendations on the voidable transaction regime and regarding protection from Ponzi schemes.  In relation to voidable transactions, the primary recommendations were repealing the "gave value" part of the defence available to creditors with a view to incre

The New South Wales Court of Appeal recently handed down an important judgment relating to the composition of classes in a creditors' scheme of arrangement.  In First Pacific Advisors LLC v Boart Longyear Limited, the Court of Appeal unanimously dismissed an appeal brought by First Pacific Advisors LLC (FPA).  The appeal was against an order made under s 411 of the Corporations Act 2011 convening meetings of creditors of Boart Longyear Limited (BLL) and several associated companies, to consider and if it saw fit, agree to two schemes of arrangements (one relating to

The Supreme Court of Victoria has recently considered whether trust property is subject to the priority regime provided for in section 556 of the Corporations Act 2001 (Cth) (the Australian equivalent of New Zealand's Schedule 7 of the Companies Act 1993).  It also considered whether a trustee's right of indemnity is subject to the obligations of receivers under section 433 of that Act, to pay employee entitlements in priority out of assets subject to a circulating security interest.

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).

The U.S. Supreme Court ruled on March 22, 2017, in Czyzewski v. Jevic Holding Corp., that without the consent of affected creditors, bankruptcy courts may not approve "structured dismissals" providing for distributions that "deviate from the basic priority rules that apply under the primary mechanisms the [Bankruptcy] Code establishes for final distributions of estate value in business bankruptcies."