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)
Court holds that distributions made pursuant to priority payment provisions contained in CDO transactions are protected by Section 560 of the Bankruptcy Code
Section 546(e) of the bankruptcy code bars state law constructive fraudulent conveyance claims asserted by creditors seeking to augment recoveries from a bankruptcy estate
Earlier today, the Second Circuit Court of Appeals issued a decision in In re Tribune Company Fraudulent Transfer Litigation, No. 13-3992-cv, holding that the Bankruptcy Code’s safe harbor of Section 546(e) (the Safe Harbor) prohibits clawback claims brought by creditors under state fraudulent transfer laws to the same extent that it prohibits such claims when brought by a debtor.
High Court says "Yes"
Need to know
In a win for creditors of insolvent companies, on 10 December 2015 the High Court determined that the obligation of a liquidator under section 254(1)(d) of the Income Tax Assessment Act 1936 (Cth) (1936 Act) to retain sufficient funds to pay tax on assets realised during the winding up only arises after a tax assessment has been made. If the funds are distributed prior to a tax assessment being made, then the obligation does not arise.
The "running account" defence to an unfair preference claim is a fragile flower. In a recent decision, the Queensland Court of Appeal has reminded solvent counterparties that suspension of a customer's trading account will probably break the "running account", exposing a solvent counterparty to greater unfair preference risk.
Need to know
A recent decision of the NSW Court of Appeal demonstrates the importance for security trustees tocarefully consider and understand their obligations in an enforcement scenario.
Need to know
The reform agenda for Australia's restructuring and insolvency regime has now received the views of the Productivity Commission, in the context of its wider review of Business Set-Up, Transfer and Closure. A draft report published on 21 May 2015 sets out a number of recommendations that, while mostly not new to the reform agenda, will be relevant to restructuring and insolvency professionals in the not-too-distant future.
Need to know
In a first for the US and Australian markets, the Buccaneer Energy group of companies successfully had bankruptcy plans approved by the US Bankruptcy Court for both US and Australian incorporated debtor companies.