This week’s TGIF considers the Federal Court’s decision in Australian Securities and Investments Commission v Merlin Diamonds Limited (No 3)[2020] FCA 411, in which, consequent on finding a number of contraventions of the Corporations Act 2001 (Cth), the Court ordered the winding up of that company.

Background

This week’s TGIF considers a decision of the Federal Court which enabled administrators of Virgin to send electronic notices, conduct electronic meetings and absolved them from personal liability for leases for four weeks due to COVID-19.

Background

On 20 April 2020, administrators were appointed to Virgin Australia Holdings Ltd and 37 of its subsidiaries (together, the Virgin Companies).

This week’s TGIF considers the decision in Aardwolf Industries LLC v Riad Tayeh [2020] NSWSC 299, in which the Supreme Court of New South Wales refused an application for leave to sue court-appointed liquidators for damages for negligence and misleading and deceptive conduct.

Background

This week’s TGIF considers the decision in Strawbridge (Administrator), in the matter of CBCH Group Pty Ltd (Administrators Appointed) (No 2) [2020] FCA 472 where the Federal Court made orders absolving the administrators of retailer Colette from personal liability for rent for a two week period, due to the COVID-19 pandemic.

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?

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

The Federal Ministry of Justice and Consumer Protection (BMJV) is currently finalizing the law to mitigate the consequences of the COVID-19 pandemic in civil, insolvency, and criminal proceedings with extraordinary commitment. It shall be adopted less than two weeks after the beginning of the extensive restrictions on public life and the economy in Germany due to the COVID-19 pandemic.

A central element of the law is to facilitate the raising of debt capital in order to support companies in the current situation. For this purpose:

Mit außerordentlichem Engagement treibt das Bundesministerium für Justiz und Verbraucherschutz (BMJV) aktuell das Gesetz zur Abmilderung der Folgen der COVID-19-Pandemie im Zivil-, Insolvenz- und Strafverfahrensrecht voran. Weniger als zwei Wochen nach Beginn der weitreichenden Einschränkungen des öffentlichen Lebens und auch der Wirtschaft in Deutschland aufgrund der COVID-19-Pandemie soll es nun verabschiedet werden.

The Federal Ministry of Justice and Consumer Protection (BMJV) now implements, with great commitment and unprecedented speed, what it has generally announced on 16 March 2020 (see also The four pillar protective governmental shield for Germany):

The Federal Ministry of Justice and Consumer Protection (BMJV) now implements, with great commitment and unprecedented speed, what it has generally announced on 16 March 2020: