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

This is the message the courts are sending to office holders seeking approval of their fees. In two recent English High Court decisions, both handed down by HHJ Cawson KC, the courts clearly expect office-holders, as fiduciaries, to produce a sufficient and proportionate level of information to justify the level of fees being claimed.

The question of whether it is competent for the court to order a retrospective administration order has been the subject of much debate before the English courts. However, until now, there have been no reported Scottish decisions dealing with the point.

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

On Wednesday, 13 September, the Economy and Fair Work Committee (the "Committee") of the Scottish Parliament heard evidence regarding the general principles of the Bankruptcy and Diligence (Scotland) Bill (the "Bill"). At this stage, the Committee is responsible for examining the Bill and making a recommendation about whether Parliament should support the main purpose of the Bill.

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

There are often difficult issues encountered when the worlds of bankruptcy and probate collide. This case is a good example.

The case concerns section 283A of the Insolvency Act 1986 ("s283A") which provides that a bankruptcy trustee must deal with a bankrupt's interest in their home within three years, otherwise the property re-vests in the bankrupt on expiry of this period. It is commonly known at the "use it or lose it" provision.

On October 14, 2022, the U.S. Court of Appeals for the Fifth Circuit issued a long-awaited ruling on whether Ultra Petroleum Corp.

In Short

The Situation: Courts have disagreed over whether a make-whole premium triggered by a borrower's bankruptcy filing must be disallowed as unmatured interest. They have also disputed whether the "solvent-debtor exception" requiring the payment of postpetition interest to unimpaired unsecured creditors of a solvent debtor survived the enactment of the Bankruptcy Code. Finally, courts have split on what rate of postpetition interest unimpaired unsecured creditors of a solvent debtor are entitled to receive.

On 24 February 2022, Russia invaded Ukraine in a major escalation of the conflict between the countries that began in 2014. The invasion by Russia was swiftly followed by international condemnation and a raft of sanctions which imposed financial, trade and other restrictions on Russia.