This week’s TGIF considers the recent proposals to crackdown on rogue directors and reduce the burden on FEG to pay unpaid workers.

A last resort – but for who?

On 17 May 2017, the Federal Government published a consultation paper inviting submissions on options for law reform to address corporate misuse of the Fair Entitlements Guarantee (‘FEG’) scheme.

This week’s TGIF considers the case of In the matter of Boart Longyear Limited [2017] NSWSC 537 in which the NSW Supreme Court made orders to assist with the restructuring of a group of companies to the ultimate benefit of creditors.

BACKGROUND

A group of companies in financial difficulty sought the Court’s approval of two interdependent creditors’ schemes of arrangement which would effect a restructuring of the group’s financial affairs. The group had operations both in Australia and the US.

(6th Cir. B.A.P. May 18, 2017)

(Bankr. E.D. Ky. May 18, 2017)

(U.S. Sup. Ct. May 15, 2017)

(Bankr. W.D. Ky. May 12, 2017)

The bankruptcy court enters summary judgment against the debtor holding the debt nondischargeable pursuant to 11 U.S.C. § 523(a)(4). The plaintiffs inherited a judgment against the debtor that was based on the debtor’s theft of the decedent’s property. The plaintiffs were the proper parties to bring the claim, as the decedent’s estate assigned the judgment to them, and the requirements of § 523(a)(4) were satisfied. Opinion below.

Judge: Lloyd

Attorneys for Plaintiffs: Crain – Schuette Attorneys, Amanda Lisenby Blakeman

This week’s TGIF considers Linc Energy Ltd (in Liq) v Chief Executive Dept of Environment & Heritage Protection [2017] QSC 53, in which the Queensland Supreme Court directed that the liquidators of Linc Energy were not justified in causing it to fail to comply with an environmental protection order

BACKGROUND

(W.D. Ky. May 2, 2017)

This week’s TGIF considers an objection by directors and related-party creditors to a liquidator retaining solicitors who had previously acted for a substantial creditor in proceedings against the company.

What happened?

On 15 August 2016, a statutory demand was issued to the operator of a Chinese dumpling restaurant. The restaurant operator failed to comply with the demand and was wound up by order of the Court. The petitioning creditor also obtained orders for the appointment of a liquidator to the restaurant operator.

(6th Cir. May 2, 2017)

The Sixth Circuit reverses the bankruptcy court, finding that the assignment of rents acted as a complete transfer of ownership and the assignor did not retain any interest in the rents. The court analyzes Michigan law on such assignments and concludes that because the debtor/assignor had no rights in the rents assigned, they were not property of the bankruptcy estate. Opinion below.

Judge: Stranch

Attorney for Appellant: Robert N. Bassel

Attorney for Appellee: Jeremy S. Friedberg