This week’s TGIF considers a recent Federal Court of Australia decision (Connelly (liquidator) v Papadopoulos, in the matter of TSK QLD Pty Ltd (in liq) [2024] FCA 888). In the case, it was determined that a restructuring adviser who engineered an asset-stripping scheme may be found liable for the full value of the loss arising out of the scheme.

Key Takeaways

Bankruptcy Law Reforms Committee (“BLRC”) was very clear while setting out the objectives of the new insolvency law for the country and speedy resolution/decision making in an insolvency situation was stated to be one of such foremost objectives. Fragmented laws governing an insolvency and lack of a cohesive framework governing the rights of various stakeholders during insolvency was identified as a primary reason for inefficiency of the pre-existing legal framework.

The rights of secured creditors under the Insolvency and Bankruptcy Code, 2016 (Code) have been a matter of continuous litigation and uncertainty. Early on, the challenge presented itself when during the insolvency resolution of Essar steel (India) Ltd., the National Company Law Appellate Tribunal (NCLAT) directed the distribution of resolution plan proceeds equally amongst all classes of creditors, including financial, operational, secured and unsecured creditors.

This week’s TGIF summarises the Federal Court of Australia’s recent decision granting leave to proceed against a company despite the appointment of a small business restructuring (SBR) practitioner under Pt 5.3B of the Corporations Act 2001 (Cth) (Corporations Act).

Key takeaways

Introduction
Delays at plan approval stage
Measures to reduce delays

Introduction

Introduction
Decision
Comment

Introduction

Introduction
Key legal issues
Comment

Introduction

Introduction
Practical implications
Comment

Introduction

What is likely to be proposed?
What is the likely impact of these proposals?

Following the finance minister's speech proposing the Union Budget 2022, Parliament is likely to consider further amendments to the Insolvency and Bankruptcy Code 2016 (IBC) in 2022.

Decision
Comment

Following several civil appeals, the Supreme Court has decided in its final order and judgment dated 13 September 2021 (the judgment) whether a resolution plan that has already been approved by the requisite majority of the committee of creditors (CoC) and that is pending the approval of the adjudicating authority can be modified or withdrawn by a resolution applicant under the Insolvency and Bankruptcy Code 2016 (the Code).