This week’s TGIF examines the recent changes to Australia’s insolvency regime, the potential implications for business and considerations for creditors in light of the impact from COVID-19.

The Australian Government has now passed theCoronavirus Economic Response Package Omnibus Bill 2020. The bill was fast-tracked through both houses of parliament with bipartisan support on 23 March 2020 and makes significant changes to Australia’s insolvency regime over the next six months.

What happened?

O Conselho Nacional de Justiça (“CNJ”) aprovou, na 307ª Sessão Ordinária, realizada de forma virtual no dia 31 de março de 2020, orientações para os juízos competentes para processamento de recuperações judiciais, diante do estado de calamidade pública e severo impacto econômico gerados pelo COVID-19.

As orientações foram aprovadas pelo CNJ por meio do Ato Normativo nº 0002561-26.2020.2.00.0000, sob relatoria do Conselheiro Relator Henrique Ávila.

A pandemia acarretada pelo Covid-19 impactou severamente a atividade econômica, diante da necessidade de adoção de medidas cada vez mais restritivas com o objetivo de diminuir a curva de propagação do coronavírus.

O impacto econômico está sendo sentido por diversos setores da economia, sendo que a mudança abrupta no cenário financeiro surpreendeu o mercado como um todo e tem tornado cada vez mais difícil o cumprimento de obrigações pelas partes contratantes.

This week’s TGIF considers the Coronavirus Economic Response Package Omnibus Act 2020, which was passed in response to the economic impact of the coronavirus. Amongst other things, the Act makes significant changes to creditor’s statutory demands and insolvent trading laws.

The Act

This week’s TGIF considers a recent application to the Federal Court by liquidators of the WDS Group for a pooling order.

What happened?

This case concerned the WDS Group of companies.

WDS Limited (WDS) was a publicly listed company on the ASX with 11 wholly owned subsidiaries (together, the WDS Group).

This week’s TGIF considers the recent case of In the matter of Newheadspace Pty Limited (in liq) [2020] NSWSC 173, where the Supreme Court of New South Wales set aside a liquidator’s examination summonses on the grounds of an abuse of process and failure to satisfy s 596B of the Corporations Act 2001 (Cth).

What happened?

This week’s TGIF examines In the matter of Bytecan Pty Limited (in liquidation) [2019] NSWSC 1910, in which the Supreme Court of New South Wales considered the scope of the advantage to an indemnifying creditor available under section 564.

The facts

The Treasury Laws Amendment (Combating Illegal Phoenixing) Act 2019 (Cth) (Amending Act) passed into law on 17 February 2020, over a year after it was first introduced to Parliament.   

Placing phoenix activity firmly in its crosshairs, the Amending Act introduces long anticipated reforms to Australia’s efforts to curb phoenix activity.  

Background 

This week’s TGIF article considers the case of Re Watch Works Australia Pty Ltd (in liq) & Anor; Ex Parte Francis & Ors [2020] WASC 6, in which the Supreme Court of Western Australia determined two linked companies were to be a ‘pooled group’ in order to satisfy the external debts payable by both companies.

What happened?

This week’s edition of TGIF considers the landmark decision of the High Court in BMW Australia Ltd v Brewster; Westpac Banking Corporation v Lenthall[2019] HCA 45 and what it might mean for insolvency practitioners.

Decision