This week’s TGIF considers a recent decision of the High Court of Australia, in which a 4:3 majority held that a former trustee is not owed any fiduciary obligation by a successor trustee.

Key takeaways

In Davis-Jacenko v Roxy’s Bootcamp Pty Limited [2024] NSWSC 702, McGrath J delivered an extempore decision, appointing provisional liquidators in respect of Roxy’s Bootcamp Pty Limited (theCompany). His Honour stated that it was “a paradigm case” for the court to intervene to preserve the status quo.

Key Takeaways

When do amounts owed to a company constitute ‘circulating assets’ and how should they be distributed? This crucial question has not always been answered predictably in recent cases. The Court of Appeal’s decision in Resilient Investment Group Pty Ltd v Barnet and Hodgkinson as liquidators of Spitfire Corporation Limited (in liq) [2023] NSWCA 118 has provided a framework for navigating the relevant principles in the context of a priority dispute over R&D tax refunds.

Key takeaways

The recent High Court judgment in Re CGL Realisations Limited (In Liquidation) in favour of Geoff Carton-Kelly as additional liquidator of failed electrical retailer Comet ordered the company’s former French parent, Darty, to pay over £100m to restore the preferential repayment of an intercompany loan owed to Darty in the run-up to Comet’s sale shortly before its insolvency. The additional liquidator was appointed in 2018 by the court specifically to investigate the circumstances of Comet’s sale in advance of its demise in 2012.

The costs regime in insolvency litigation is outdated and not fit for purpose, especially when it comes to the clawback claims designed to allow officeholders to restore the insolvent estate when assets have been deliberately dissipated. Many such claims can become uneconomical to run, especially where recipients of dissipated assets have no desire to preserve them but every incentive to diminish them with their own costs. Often a sale or assignment is the last resort to seek justice against wrongdoers in such situations.

Another interesting summary in the Times reporting on the staggering levels of fraud committed against the UK taxpayer during the pandemic. Whilst the Insolvency Service are clearly doing their best to hold fraudsters to account through disqualification orders and similar punitive measures, it appears that we are no closer to a financial recovery of any meaningful value, or at the very least imposing real financial pain on those who took advantage of the country’s generosity in the face of the unprecedented challenges of the Covid pandemic.

In the recent case of Stubbings v Jams 2 Pty Ltd [2022] HCA 6, the High Court has allowed an appeal relating to asset-based lending (ABL) and the enforceability of security associated with these loans. The High Court held that whilst asset-based lending itself is not unconscionable, certain conduct may render loans and security unenforceable. The decision is a reminder that lenders should ensure the circumstances of potential borrowers are fully scrutinised prior to lending.

This week’s TGIF considers a recent case where the Supreme Court of Queensland rejected a director’s application to access an executory contract of sale entered into by receivers and managers on the basis it was not a ‘financial record’

Key Takeaways

This week’s TGIF looks at the decision of the Federal Court of Australia in Donoghue v Russells (A Firm)[2021] FCA 798 in which Mr Donoghue appealed a decision to make a sequestration order which was premised on him ‘carrying on business in Australia' for the purpose of section 43(1)(b)(iii) of the Bankruptcy Act 1966 (Cth) (Act).

Key Takeaways

This week’s TGIF considers an application to the Federal Court for the private hearing of a public examination where separate criminal proceedings were also on foot.

Key takeaways