WHAT HAPPENED?

On 4 February 2013, Stansfield DIY Wealth Pty Ltd (in liquidation) was wound up, and a liquidator was appointed. At that time, the only function of the company was acting as trustee of a self-managed superannuation fund. It had no assets or liabilities, save in its capacity as trustee of the super fund.

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.

You are probably aware of the useful restructuring and creditor protection process available to insolvent entities in the United States under Chapter 11 of the United States Bankruptcy Code. In Canada, more than one insolvency regime is available in respect of debtor companies in financial difficulty and those interested in acquiring such companies or their assets. However, because of its flexibility, the most commonly used Canadian regime for larger debtor companies or complicated restructurings is the Companies’ Creditors Arrangement Act (Canada) (the "CCAA").