On 4 February 2020, the Federal Court of Australia considered the circumstances in which it might be said that a provisional liquidator of a company ought not be appointed as the official liquidator because of an alleged "reasonable apprehension of bias". The issue was ventilated before the Court in the matter of  Frisken (as receiver of Avant Garde Investments Pty Ltd v Cheema [2020] FCA 98.

Appointing a provisional liquidator

Entering into liquidation can be a scary time for any company and its officers, even one which chooses to do so voluntarily. However, the directors, shareholders and creditors of a company entering into liquidation do not have absolute discretion as to who they may appoint as the liquidator of the company. Together, the Corporations Act and common law principles of independence regulate the eligibility of a liquidator to be appointed to a company, and to remain in the appointment.

Overarching eligibility

In the recent decision of Boensch as Trustee of the Boensch Trust v Scott Darren Pascoe [2019] HCA 49, the High Court has clarified whether property held by a bankrupt on trust for another vests in the bankrupt's trustee in bankruptcy, and the circumstances in which a trustee in bankruptcy will have reasonable cause to lodge a caveat to protect an interest in the trust property.

Background

In the recent decision of In the matter of Parkway One Pty Limited (in liquidation) [2019] NSWSC 1495 (Parkway), Rees J dismissed an application to terminate the winding up of Parkway One Pty Ltd (in liquidation) (the Company) due to inconclusive evidence as to the solvency of the Company and, having regard to the non-compliance by its director of her statutory duties and the likelihood of the Company not being able to service the current and foreseen indebtedness, her Honour held that it would be contrary to commercial morality to terminate the wi

The High Court gave its ruling yesterday in the case of Discover (Northampton) Limited and others v Debenhams Retail Limited and others [2019] EWHC 2441 (Ch), rejecting four of the five grounds on which the Applicants disputed the validity of the company's Creditors Voluntary Arrangement ("CVA"), which was approved by creditors in May 2019.

The decision of the High Court of Australia in Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28; 261 CLR 132 (Ramsay) clarified the limits of a Bankruptcy Court's discretion to "go behind" a judgment, that is, to investigate whether the underlying debt relied upon for the making of a sequestration order is, in truth and reality, owing to the petitioning creditor. Recently, the Ramsay decision was applied by the Federal Court of Australia in Dunkerley v Comcare [2019] FCA 1002 (Dunkerley).

Introduction The UK Government has announced that it will be introducing legislation under which the UK tax authorities1 will move up the creditor hierarchy in English insolvency proceedings2 in respect of certain taxes paid by

Liquidators are encouraged to seek advice or directions from the Court as to the discharge of their responsibilities. But who bears the costs of such proceedings, of the liquidator and of any contradictor involved?

In the recent case of In the matter of Gondon Five Pty Limited and Cui Family Asset Management Pty Limited [2019] NSWSC 469, the New South Wales Supreme Court (Brereton J) considered the purpose and scope of an appointment as receiver to a company, and came down particularly hard on an insolvency practitioner for performing work and incurring expenses which were determined to be outside, or not incidental to, the scope of his appointment.

Background

Introduction

In the recent case of Global Corporate Ltd v Hale , the Court of Appeal was asked to assess whether sums, described as “interim dividends”, paid to Mr. Hale (the “Respondent”) in his capacity as both a director and shareholder of Powerstation UK Limited (the “Company”), had been made in accordance with section 830 of the Companies Act 2006 (the “Act”) prior to the Company’s insolvency.