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Sweet disposition: Court validates dispositions of company property made after the commencement of a winding up

This week’s TGIF considers a recent Federal Court decision which validated dispositions of property made by a company after the winding up began.

WHAT HAPPENED?

On 8 May 2017, Bond J ordered that a coal exploration company (the Company) be wound up on just and equitable grounds following a shareholder oppression claim. So as to avoid the consequences of a liquidation, his Honour immediately stayed that order for a period of 7 days to enable the warring parties a final chance to resolve their differences.

Australia, Insolvency & Restructuring, Corrs Chambers Westgarth
A Good Reason for a Special Purpose

This week’s TGIF considers a recent decision of the Federal Court where a special purpose liquidator was appointed to investigate suspected illegal phoenix activity.

WHAT HAPPENED?

The company formerly known as Intelara Pty Ltd (Intelara) was wholly owned by and had common directors with Intelara Holdings Pty Ltd (Holdings). The directors of both companies were also the shareholders of Holdings.

Australia, Capital Markets, Insolvency & Restructuring, Litigation, Corrs Chambers Westgarth, Corporations Act 2001 (Australia)
Local Bankruptcy Rules Cannot Add Additional Chapter 13 Confirmation Requirements

Bankruptcy Judges cannot impose additional local chapter 13 confirmation requirements beyond those created by Congress, according to the Southern District of Illinois (the “District Court”).

USA, Insolvency & Restructuring, Litigation, Real Estate, Nelson Mullins Riley & Scarborough LLP, United States bankruptcy court
Directions engineered: conduct justified - substantive rights not affected

This week’s TGIF considers Re Broens Pty Limited (in liq) [2018] NSWSC 1747, in which a liquidator was held to be justified in making distributions to creditors in spite of several claims by employees for long service leave entitlements.

What happened?

On 19 December 2016, voluntary administrators were appointed to Broens Pty Limited (the Company). The Company supplied machinery & services to manufacturers in aerospace, rail, defence and mining industries.

Australia, Employment & Labor, Insolvency & Restructuring, Litigation, Corrs Chambers Westgarth
You can’t rely on anyone but yourself - insolvent companies, litigation funding and security for costs

This week’s TGIF considers Australian Worldwide Pty Ltd v AW Exports Pty Ltd where the Court awarded security for costs against plaintiff companies in liquidation, despite a litigation funder’s indemnity against adverse costs.

Background

Australia, Insolvency & Restructuring, Litigation, Corrs Chambers Westgarth
Does an Unsecured Creditors’ Committee Have an Absolute Right to Intervene in Adversary Proceedings? The First Circuit Says Yes

An Official Committee of Unsecured Creditors (“UCC”) often plays an active role in larger, more complex business bankruptcy cases. But what right, if any, does a UCC have to intervene in a bankruptcy adversary proceeding? The First Circuit Court of Appeals recently addressed this very issue in Assured Guaranty Corp., et al. v. The Financial Oversight and Management Board of Puerto Rico, et. al., 17-1831 (1st Cir. Sept. 22, 2017) (“Financial Oversight”) and ultimately held that a UCC does have such a right.

USA, Insolvency & Restructuring, Litigation, Nelson Mullins Riley & Scarborough LLP, First Circuit
TUPE does apply to transfers of companies in administration

Key2Law (Surrey) LLP -v- De' Antiquis [2011] EWCA Civ 1567

The Court of Appeal issued its long-awaited Judgment in the case of Key2Law (Surrey) LLP -v- De' Antiquis, confirming that businesses which are in administration are not exempted from TUPE.

United Kingdom, Employment & Labor, Insolvency & Restructuring, Litigation, MacRoberts LLP, Transfer of Undertakings (Protection of Employment) Regulations 2006 (UK)