Two recent Supreme Court of Canada decisions demonstrate that the corporate attribution doctrine is not a one-size-fits-all approach.
Court approval of a sale process in receivership or Bankruptcy and Insolvency Act (“BIA”) proposal proceedings is generally a procedural order and objectors do not have an appeal as of right; they must seek leave and meet a high test in order obtain it. However, in Peakhill Capital Inc. v.
The recent Supreme Court of New South Wales decision of Fitz Jersey Pty Ltd v Atlas Construction Group Pty Ltd (in liq)1 clarifies that s 588FF of the Corporations Act permits an assignee of a liquidator’s voidable transaction claim to trace a company’s property or proceeds for the purposes of the assignee’s recovery proceedings.
In brief
The courts were busy in the second half of 2021 with developments in the space where insolvency law and environmental law overlap.
In Victoria, the Court of Appeal has affirmed the potential for a liquidator to be personally liable, and for there to be a prospective ground to block the disclaimer of contaminated land, where the liquidator has the benefit of a third-party indemnity for environmental exposures.1
In brief
Australia's borders may be closed, but from the start of the pandemic, Australian courts have continued to grapple with insolvency issues from beyond our shores. Recent cases have expanded the recognition of international insolvency processes in Australia, whilst also highlighting that Australia's own insolvency regimes have application internationally.
Key takeaways
In brief
With the courts about to consider a significant and long standing controversy in the law of unfair preferences, suppliers to financially distressed companies, and liquidators, should be aware that there have been recent significant shifts in the law about getting paid in hard times.
This was first published in the LexisNexis Insolvency Law Bulletin (Vol. 21, No. 5 & 6).
This article is co-authored by Justin Ward of Litigation Capital Management and Marcel Fernandes of 12 Wentworth Selborne Chambers.
Background
The plaintiff was the primary trading entity within a larger group of companies which operated a development and construction business.
The liquidation of the group was complex, with a significant number of claims identified as requiring investigation. Further, ASIC’s allegations of serious misconduct resulted in a significant amount of the liquidator’s time being allocated to assisting ASIC with its investigation.
Problem
This article was originally published in the Australian Restructuring, Insolvency & Turnaround Association Journal (Volume 32 #01 2020)
The first of March marked the second anniversary of the changes to the Corporations Act 2001 (Cth) (Act) permitting an external administrator to assign rights to sue. The Australian Government proposed the reform in the hope that the ‘sale of rights of action may enable the value in such rights to be realised’[1].