This week’s TGIF considers a decision of the Federal Court which enabled administrators of Virgin to send electronic notices, conduct electronic meetings and absolved them from personal liability for leases for four weeks due to COVID-19.

Background

On 20 April 2020, administrators were appointed to Virgin Australia Holdings Ltd and 37 of its subsidiaries (together, the Virgin Companies).

This week’s TGIF considers the decision in Aardwolf Industries LLC v Riad Tayeh [2020] NSWSC 299, in which the Supreme Court of New South Wales refused an application for leave to sue court-appointed liquidators for damages for negligence and misleading and deceptive conduct.

Background

This week’s TGIF considers the decision in Strawbridge (Administrator), in the matter of CBCH Group Pty Ltd (Administrators Appointed) (No 2) [2020] FCA 472 where the Federal Court made orders absolving the administrators of retailer Colette from personal liability for rent for a two week period, due to the COVID-19 pandemic.

This week’s TGIF examines the recent changes to Australia’s insolvency regime, the potential implications for business and considerations for creditors in light of the impact from COVID-19.

The Australian Government has now passed theCoronavirus Economic Response Package Omnibus Bill 2020. The bill was fast-tracked through both houses of parliament with bipartisan support on 23 March 2020 and makes significant changes to Australia’s insolvency regime over the next six months.

What happened?

This week’s TGIF considers the Coronavirus Economic Response Package Omnibus Act 2020, which was passed in response to the economic impact of the coronavirus. Amongst other things, the Act makes significant changes to creditor’s statutory demands and insolvent trading laws.

The Act

Jamais dans l’histoire les entreprises de toutes tailles et de pratiquement toutes les industries n’ont affronté une crise résultant à la fois d’un tarissement des sources d’approvisionnement et de la demande de façon simultanée. La crise de liquidités qui en découle engendre une insécurité omniprésente au sein des gestionnaires des entreprises et de l’ensemble des parties intéressées de celles-ci, incluant leurs employés, actionnaires, clients, fournisseurs, créanciers et les communautés dans lesquelles les entreprises opèrent.

Never before in history have businesses of all sizes and of all or almost all industries faced a crisis resulting from a simultaneous decline of supply and demand. The resulting liquidity crisis is creating pervasive insecurity among the managers of businesses and the stakeholders of those businesses, including their employees, shareholders, customers, suppliers, creditors and the communities in which the businesses operate.

This week’s TGIF considers a recent application to the Federal Court by liquidators of the WDS Group for a pooling order.

What happened?

This case concerned the WDS Group of companies.

WDS Limited (WDS) was a publicly listed company on the ASX with 11 wholly owned subsidiaries (together, the WDS Group).

As governments impose restrictions on travel and more and more people are self-isolating and taking steps towards social distancing, the entire travel industry, the live entertainment industry and businesses with bricks and mortar presences, like restaurants and retail stores, expect to experience an immediate drop in revenue.

This week’s TGIF considers the recent case of In the matter of Newheadspace Pty Limited (in liq) [2020] NSWSC 173, where the Supreme Court of New South Wales set aside a liquidator’s examination summonses on the grounds of an abuse of process and failure to satisfy s 596B of the Corporations Act 2001 (Cth).

What happened?