This week’s TGIF considers State of Victoria v Goulburn Administration Services (In Liquidation) and Ors [2016] VSC 654, in which Special Purpose Liquidators were appointed despite a potential conflict arising from their firm having conducted compliance audits of the companies.
Background
At first glance, it seems that cross-border insolvencies between the UK and EU are likely to become more time-consuming, complex and expensive post-Brexit. However, the situation may not be as dire as it first appears due to the existence of alternative legislation and the exemptions to the EU legislation. As with other areas of law, when it comes to insolvencies much will depend on what steps are taken to maintain the current arrangements with the EU or whether they fall away altogether.
In the recent judgment of Gorbunova v The Estate of Boris Berezovsky (deceased) and others1 the High Court has provided useful guidance as to when summary judgment is appropriate in deciding whether a trust was established.
The High Court has upheld the pari passu principle central to English insolvency legislation when applied to a deceased’s insolvent estate and interpreting legislation stated to be “modified accordingly”. This approach clarifies that foreign currency claims and claims for interest should be calculated for voting purposes as at the date of death, rather than the date an Insolvency Administration Order (IAO) is made. HFW acted for the respondent in this case.
Introduction
On 11 September 2014, the Supreme Court of New South Wales delivered judgment in Allco Funds Management Limited (Receivers and Managers Appointed) (In Liquidation) v Trust Company (RE Services) Limited (in its capacity as responsible entity and trustee of the Australian Wholesale Property Fund) [2014] NSWSC 1251.
The decision reminds directors of the risks associated with their involvement in transactions where they are in a position of conflict.
BACKGROUND
The Financial System Inquiry was formed on 20 November 2013 by our Federal Treasurer to examine how our financial system could be positioned to best meet Australia’s evolving needs and support economic growth. The Inquiry received over 280 first round submissions and released it’s Interim Report earlier this week. [1]
In Stewart v Atco Controls Pty Limited (in liquidation) [2014] HCA 15, the High Court confirmed the Universal Distributing principle that a liquidator is entitled to be paid his or her remuneration and expenses in realising assets in priority to a secured creditor.
BACKGROUND
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
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.
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