A party must meet a high bar before the High Court will modify or reverse a liquidator’s decision, or consent to a party commencing adjudication (or other legal proceedings) against a company in liquidation (ss 284(1)(b) and 248(1)(c) of the Companies Act 1993, respectively).

Both issues have been examined by the Court of Appeal in United Civil Construction Ltd v Hayfield SHA Ltd (In Liq) [2023] NZCA 377. This case illustrates the limited avenues available for a contractor to resolve payment of outstanding debts after a principal goes into liquidation.

The Bankruptcy Code confers upon debtors or trustees, as the case may be, the power to avoid certain preferential or fraudulent transfers made to creditors within prescribed guidelines and limitations. The U.S. Bankruptcy Court for the District of New Mexico recently addressed the contours of these powers through a recent decision inU.S. Glove v. Jacobs, Adv. No. 21-1009, (Bankr. D.N.M.

In Meltzer and Lamacraft v Amstar New Zealand Ltd the High Court highlighted the interplay between insolvency and construction adjudication issues.

The High Court in Meltzer and Lamacraft v Amstar New Zealand Ltd [2020] NZHC 3510 has confirmed that a payee cannot enforce an adjudication determination and may not be able to maintain charging orders if the payer goes into administration.

In In re Smith, (B.A.P. 10th Cir., Aug. 18, 2020), the U.S. Bankruptcy Appellate Panel for the U.S. Court of Appeals for the Tenth Circuit recently joined the majority of circuit courts of appeals in finding that a creditor seeking a judgment of nondischargeability must demonstrate that the injury caused by the prepetition debtor was both willful and malicious under Section 523(a)(6) of the Bankruptcy Code.

Factual Background

In a recent decision, the U.S. Bankruptcy Court for the Southern District of New York held that claim disallowance issues under Section 502(d) of the Bankruptcy Code "travel with" the claim, and not with the claimant. Declining to follow a published district court decision from the same federal district, the bankruptcy court found that section 502(d) applies to disallow a transferred claim regardless of whether the transferee acquired its claim through an assignment or an outright sale. See In re Firestar Diamond, 615 B.R. 161 (Bankr. S.D.N.Y. 2020).

InIn re Juarez, 603 B.R. 610 (9th Cir. BAP 2019), the Bankruptcy Appellate Panel of the U.S. Court of Appeals for the Ninth Circuit addressed a question of first impression in the circuit with respect to property that is exempt from creditor reach: it adopted the view that, under the "new value exception" to the "absolute priority rule," an individual Chapter 11 debtor intending to retain such property need not make a "new value" contribution covering the value of the exemption.

Background

In In re Palladino, 942 F.3d 55 (1st Cir. 2019), the U.S. Court of Appeals for the First Circuit addressed whether a debtor receives “reasonably equivalent value” in exchange for paying his adult child’s college tuition. The Palladino court answered this question in the negative, thereby contributing to the growing circuit split regarding the avoidability of debtors’ college tuition payments for their adult children as constructively fraudulent transfers.

Background

Following our previous updates (Ebert Construction Receivership – What You Need to Know and Ebert Construction – Receivership and Liquidation), on 12 November 2018 the High Court ordered that the Receivers of Ebert Construction Ltd (in rec and liq) (Ebert) be appointed as the receivers

In a matter of first impression, the U.S. Bankruptcy Court for the Northern District of New York recently analyzed whether a debtor may exempt from her bankruptcy estate a retirement account that was bequeathed to her upon the death of her parent. In In re Todd, 585 B.R. 297 (Bankr. N.D.N.Y 2018), the court addressed an objection to a debtor’s claim of exemption in an inherited retirement account, and held that the property was not exempt under New York and federal law.

Introduction

Following our Initial Note, the receivers of Ebert Construction Ltd (Ebert) released their first report on 1 October 2018. Then, on 3 October 2018, Ebert put itself into liquidation, with the liquidators subsequently issuing their first report on 10 October 2018. These developments have provided further information about Ebert’s financial position and the insolvency process.