Puerto Rico is in the midst of a ­financial crisis. Over the past few years, its public debt skyrocketed while its government revenue sharply declined. In order to address its economic problems and to avoid mass public-worker layoffs and cuts in public services, the unincorporated U.S. territory issued billions of dollars in face value of municipal bonds. These bonds were readily saleable to investors in the United States due to their tax-exempt status and comparatively high yields.

This week’s TGIF considers the Federal Court decision of National Australia Bank Ltd v Garrett [2016] FCA 714 in which the Court stepped in to invalidate and restrain an improper registration on the PPSR

BACKGROUND

The recent decision of the New South Wales Supreme Court in Independent Contractor Services (Aust) Pty Limited ACN 119 186 971 (in liquidation) (no 2) [2016] NSWSC 106 found that the statutory scheme of priority does not apply to realisations from circulating trust assets. This decision has potentially profound impacts for both employees and secured creditors in the context of both liquidations and receiverships.

A summary of the case

This week’s TGIF considers the decision of Deputy Commissioner of Taxation v BE100 Property Investments Pty Ltd [2016] FCA 597 where the court found that a deed administrator acted unreasonably by attempting to terminate a deed of company arrangement immediately before a meeting of creditors.

This week’s TGIF considers the decision in Hussain v CSR Building Products Limited, in the matter of FPJ Group Pty Ltd (In Liq), in which an ROT clause was held to be a “security”, defeating the liquidators’ unfair preference claim.

Background

On 18 July 2014, FPJ Group Pty Ltd (FPJ Group) was wound up in insolvency.

This week’s TGIF examines the NSW Supreme Court decision In the Matter of Kevin Jacobsen Pty Limited (in liq) [2016] NSWSC 538 which considered a challenge to an application under s 477(2B) to assign a cause of action.

WHAT HAPPENED?

On 10 August 2015, the liquidators of Kevin Jacobsen Pty Limited (in liquidation) (KJPL) applied to the NSW Supreme Court for:

On May 16, 2016, the Supreme Court of the United States handed down its opinion in Husky International Electronics, Inc. v. Ritz, Case No. 15-145.

This week’s TGIF considers the decision of In the matter of THO Services Limited [2016] NSWSC 509 in which the Court exercised its general power to extend the voluntary administration moratorium period to a commercial arbitration.

BACKGROUND

This week’s TGIF considers the recent NSW Court of Appeal decision of Commissioner of Taxation of the Commonwealth of Australia v 4 Doonan Street Collinsville Pty Ltd (in liq) [2016] NSWCA 69 in which the Court considered the validity of the Commissioner of Taxation’s treatment of debits and credits in an insolvency context.

FACTS

Adding to the unsettled body of case law on the enforceability of prepetition waivers of the automatic stay, on April 27, 2016, the U.S.