In this week’s TGIF, we consider the dangers of being the last one standing in ‘mothership’ preference claims. In the recent decision of In the matter of Bias Boating Pty Limited (receivers and managers appointed) (in liquidation) [2019] NSWSC 47, Black J ordered costs against a number of defendants to a preliminary question of insolvency even though they did not participate in the hearing of that question.

A U.S. Bankruptcy Court has denied a creditor’s motion for sanctions against a law firm in the Middle District of Florida which the creditor alleged engaged in serial filings.

This week’s TGIF covers the Federal Court’s refusal in Lock, in the matter of Cedenco JV Australia Pty Ltd (in liq) (No 2) [2019] FCA 93 to validate creditors’ resolutions fixing $5m+ of remuneration where creditors were given insufficient information; reduced remuneration to be fixed.

11 February orders refusing validation

This week’s TGIF considers Re Legend International Holdings Inc (In liq) [2018] VSC 789, the next chapter in the story of Legend International Holdings Inc, where the Court found a company to be insolvent on the basis of a foreign debt.

A federal bankruptcy court for the Southern District of Florida has ruled that the owner of a computer-financing scheme cannot hide behind a bankruptcy filing to shield himself from complying with a contempt order that required him to pay $13.4 million for violating an FTC order.

Pursuant to 11 U.S.C. § 1322(b)(2), a Chapter 13 bankruptcy plan cannot modify the rights of a secured creditor whose claim is only secured by an “interest in real property that is the debtor’s principal residence.” On December 6, the Eleventh Circuit held that this provision prevents the discharge of a mortgage in a Chapter 13 bankruptcy, regardless of whether the plan “provided for” the mortgage or whether the mortgagee filed a proof of claim.

This week’s TGIF considers Re Broens Pty Limited (in liq) [2018] NSWSC 1747, in which a liquidator was held to be justified in making distributions to creditors in spite of several claims by employees for long service leave entitlements.

What happened?

On 19 December 2016, voluntary administrators were appointed to Broens Pty Limited (the Company). The Company supplied machinery & services to manufacturers in aerospace, rail, defence and mining industries.

This week’s TGIF considers Australian Worldwide Pty Ltd v AW Exports Pty Ltd where the Court awarded security for costs against plaintiff companies in liquidation, despite a litigation funder’s indemnity against adverse costs.

Background

The West Virginia Consumer Credit and Protection Act (“WVCCPA”) is a remedial statute designed to protect West Virginia consumers from improper debt collection. Only “consumers” have standing to file a lawsuit under the WVCCPA. The term “consumer” is defined as a natural person that owes a debt or allegedly owes a debt. But does a person still owe debt if that debt was discharged by a bankruptcy court? Although there is some conflicting case law in West Virginia, an answer is forming.

On October 26, the Eastern District of Wisconsin issued a ruling dismissing a Fair Credit Reporting Act case. In Garland v. Marine Credit Union, the Court granted summary judgment in favor of the debt collector, holding the dispute was a legal issue such that the consumer could not establish a factual inaccuracy in the credit reporting.