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
Overview
We asked our team for their predictions of what they think 2025 might bring in the Property Disputes sector.
Insolvencies and Restructuring
Overview
Judgment was handed down on 30 September sanctioning the much-trailed restructuring plans for the Cineworld UK group of companies. The sanctioning of the Plans was widely expected, but drama came at the eleventh hour as a result of two last minute challenges brought by UK Commercial Property Finance Holdings ("UKCP") and the Crown Estate (both landlords of Cineworld leases). UKCP and the Crown Estate sought injunctions - not to challenge the Plans in themselves - but to order the removal of their leases from the Plans.
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
Economic headwinds continue to make life difficult for retail and leisure operators. Wilko, of course, is the latest high profile retailer to enter administration, following on the heels of retailers such as Paperchase, Hotter Shoes and AMT Coffee. Cineworld's route out of Chapter 11 bankruptcy has involved the administration of its UK parent, although the operating companies have remained unaffected.
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
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
Landlords have become used to the concept of the retail CVA over the past few years, but the new post COVID-19 breed of CVAs has been pushing the boundaries as never before. Further, a new restructuring option – described by some as a “CVA on steroids” – is now available to tenants courtesy of the recently enacted Corporate Insolvency and Governance Act: the s26A Restructuring Plan. Restructuring Plans enable companies, with the sanction of the Court, to impose new terms on creditors even in circumstances where not all classes of creditor have approved the plan.