The recent High Court judgment in Re CGL Realisations Limited (In Liquidation) in favour of Geoff Carton-Kelly as additional liquidator of failed electrical retailer Comet ordered the company’s former French parent, Darty, to pay over £100m to restore the preferential repayment of an intercompany loan owed to Darty in the run-up to Comet’s sale shortly before its insolvency. The additional liquidator was appointed in 2018 by the court specifically to investigate the circumstances of Comet’s sale in advance of its demise in 2012.
The costs regime in insolvency litigation is outdated and not fit for purpose, especially when it comes to the clawback claims designed to allow officeholders to restore the insolvent estate when assets have been deliberately dissipated. Many such claims can become uneconomical to run, especially where recipients of dissipated assets have no desire to preserve them but every incentive to diminish them with their own costs. Often a sale or assignment is the last resort to seek justice against wrongdoers in such situations.
Another interesting summary in the Times reporting on the staggering levels of fraud committed against the UK taxpayer during the pandemic. Whilst the Insolvency Service are clearly doing their best to hold fraudsters to account through disqualification orders and similar punitive measures, it appears that we are no closer to a financial recovery of any meaningful value, or at the very least imposing real financial pain on those who took advantage of the country’s generosity in the face of the unprecedented challenges of the Covid pandemic.
This week’s TGIF considers a recent case where the Supreme Court of Queensland rejected a director’s application to access an executory contract of sale entered into by receivers and managers on the basis it was not a ‘financial record’
Key Takeaways
This week’s TGIF looks at the decision of the Federal Court of Australia in Donoghue v Russells (A Firm)[2021] FCA 798 in which Mr Donoghue appealed a decision to make a sequestration order which was premised on him ‘carrying on business in Australia' for the purpose of section 43(1)(b)(iii) of the Bankruptcy Act 1966 (Cth) (Act).
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This week’s TGIF considers an application to the Federal Court for the private hearing of a public examination where separate criminal proceedings were also on foot.
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This week’s TGIF looks at a recent decision of the Victorian Supreme Court, where a winding up application was adjourned to allow the debtor company to pursue restructuring under the recently introduced small business restructuring reforms.
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This week’s TGIF considers the decision of the Supreme Court of New South Wales In the matter of Gearhouse BSI Pty Ltd [2021] NSWSC 98. In this case, one of the joint venture parties obtained an order to wind up the joint venture on the basis that the underlying purpose of the business had failed.
Key takeaways
This week’s TGIF considers an application to wind up a company on just and equitable grounds. The Court declined to make the order, finding the suggested deadlock had an air of artificiality and the application was infused with self-interest.
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This week’s TGIF considers the decision in Nikitins v EncoreFX (Australia) Pty Ltd (No 2) [2021] FCA 27, where the Federal Court found that funds paid into a holding account for the provision of foreign exchange services were held on trust and were not property of the liquidation.
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