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Effect of a company’s insolvency on an unperfected security interest

The recent WA Supreme Court decision in White v Spiers Earthworks Pty Ltd [2014] WASC 139, highlights the consequences of not registering a security interest under the Personal Property Securities Act 2009 (PPSA) when a company becomes insolvent.

The case also provides guidance about certain PPSA savings provisions, the treatment of transitional security interests and the primacy of PPSA over pre-PPSA legislation.

BACKGROUND

Australia, Western Australia, Banking, Insolvency & Restructuring, Litigation, Corrs Chambers Westgarth
Waive your privilege goodbye: the consequences of not claiming privilege during a public examination

The recent Victorian Supreme Court decision of Le Roi Homestyle Cookies Pty Ltd (in liquidation) v Gemmell [2013] VSC 452 determined that a person who does not claim privilege when being publicly examined by a liquidator will not be allowed to avoid pleading and providing discovery in subsequent civil proceedings on the basis that complying may expose them to a civil penalty or criminal sanction.

Facts

The defendants were alleged former de facto and shadow directors of Le Roi Homestyle Pty Ltd.

Australia, Victoria, Insolvency & Restructuring, Litigation, Corrs Chambers Westgarth, Discovery, Victoria Supreme Court
Personal jurisdiction

Tenth Circuit holds that Canadian nationals who conspire to commit a breach of fiduciary duty against a Delaware corporation operating exclusively in Oklahoma are subject to personal jurisdiction in Oklahoma despite their lack of physical contact with the state.  Canadian law firm alleged to have assisted the conspirators is not, however, subject to personal jurisdiction.

USA, Insolvency & Restructuring, Litigation, Baker McKenzie, Fiduciary, Personal jurisdiction, Delaware General Corporation Law, Tenth Circuit
Examinations by foreign representatives in cross border insolvency

The Federal Court decision of Crumpler (as liquidator and joint representative) of Global Tradewaves Ltd (a company registered in the British Virgin Islands) v Global Tradewaves (in liquidation), in the matter of Global Tradewaves Ltd (in liquidation)[2013] FCA 1127 provides an illustrative example of the way that cross border insolvency recognition can be used to aid a foreign administration.

Facts

Australia, British Virgin Islands, Insolvency & Restructuring, Litigation, Corrs Chambers Westgarth, Liquidation
Factors that will lead a court to grant an extension to a convening period

The recent Federal Court of Australia (Court) decision Hird, in the matter of Allmine Group Limited (Administrators Appointed) (Receivers and Managers Appointed) [2013] FCA 748 involved an application for an extension to the convening period.

Facts

Australia, Insolvency & Restructuring, Litigation, Corrs Chambers Westgarth, Holding company, Corporations Act 2001 (Australia), Federal Court of Australia
District court holds that a bankruptcy action’s automatic stay, and the bankruptcy's court's power to enjoin violations of the stay, applied extraterritorially

Sec. Investor Prot. Corp. v. Bernard L. Madoff Inv. Secs., 474 B.R. 76 (2012)

The trustee for the Securities Investor Protection Act ("SIPA") liquidation of Bernard L. Madoff Investment Securities LLC ("BLMIS") filed a complaint in the bankruptcy court against Maxam Absolute Return Fund Ltd. ("Maxam"), seeking the return of about $100 million distributed to Maxam by BLMIS.  Maxam answered the complaint and then sued the trustee in the Cayman Islands seeking a declaration that it was not required to return the money. 

USA, Insolvency & Restructuring, Litigation, Baker McKenzie, Bankruptcy, Debtor, Injunction, Extraterritoriality
Bankruptcy court declines to accord comity to reorganization plan approved by Mexican court

In re Vitro, S.A.B. de C.V., No. 11-33335-HDH-15 (Bankr. N.D. Tex. June 13, 2012)

USA, Insolvency & Restructuring, Litigation, Baker McKenzie, Bankruptcy, Debtor, Comity, Title 11 of the US Code