Yesterday in Canberra, a significant step forward for Australian insolvency law reform was taken: Parliament passed the much anticipated "safe harbor" for directors in relation to insolvent trading liability and moratorium on reliance by solvent counterparties on “ipso facto” clauses in voluntary administration and creditors schemes of arrangement.

Key Points

On the key points:

In a wide-reaching judgment concerning an appeal by Mighty River International in the administration of Mesa Minerals, the Western Australian Court of Appeal, has recognised that “holding” Deed of Company Arrangement (DOCA) is permissible under Part 5.3A of the Corporations Act.

The key points – Holding DOCAs as a flexible framework

The key points for insolvency and turnaround professionals to take from Mighty River International v Hughes are:

In a decision of importance for liquidators and litigation funders, the Western Australian Court of Appeal in Perrine v Carrello has further explained the important issue of how to determine the amount of compensation recoverable by liquidators where insolvent trading has occurred.

In a wide-reaching judgment concerning an appeal by Mighty River International in the administration of Mesa Minerals, the Western Australian Court of Appeal has recognised that a "holding" Deed of Company Arrangement (DOCA) is permissible under Part 5.3A of the Corporations Act.

The key points - Holding DOCAs as a flexible framework

The key points for insolvency and turnaround professionals to take from Mighty River International v. Hughes are:

The insolvent trading "safe harbour" and "ipso facto" clause reform

The key points

Last week, the federal government circulated an exposure draft of the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill (the Bill). The Bill is intended to promote entrepreneurship and innovation among directors of companies facing insolvency - this is to be achieved through two fundamental changes to existing insolvency laws.

Court of Appeal sets the record straight

The key point

On March 9, 2017, a full bench of the New South Wales Court of Appeal handed down a significant decision affecting approach to judicial review and approval of liquidator remuneration. Significantly, existing tension between decisions of different judges at first instance, and between NSW and Federal courts, has been resolved.

Court of Appeal sets the record straight

The key point 

Earlier today, a full bench of the New South Wales Court of Appeal handed down a significant decision affecting approach to judicial review and approval of liquidator remuneration. Significantly, existing tension between decisions of different judges at first instance, and between NSW and Federal courts, has been resolved.

With the Australian Taxation Office very active in winding up companies for unpaid taxes, it is now commonplace for insolvency professionals to be faced with pending winding up petitions when considering an appointment as voluntary administrator. Obtaining an adjournment of the petition is often the first critical task in an administration.

The recent decision in Re Swan Services Pty Limited (in liq)

Trust claims against a borrower’s assets are something that no secured creditor wants to be confronted with. Such claims are often unexpected because they are, for the most part, undetectable. They lurk in the shadows, out of the reach of traditional due diligence measures and PPSA searches. As a result, even the most prudent of creditors can sometimes find themselves facing these undocumented and unquantifiable claims.