Mr Pala and Mr Luthera were directors of Shanton, a large retailer of women's clothing in New Zealand.  BTC Group Limited (BTC) was in the business of supplying clothing to Shanton in accordance with Shanton's stock orders.  BTC had obtained guarantees from Shanton's directors, pursuant to which each director guaranteed the obligations of Shanton to BTC.  Earlier this year, Shanton was unable to pay its debts as they fell due and was placed into voluntary administration owing creditors over $7m.

In Stojkov v Kamal [2015] NZHC 2513 a creditor, Mr Stokjov, gave notice to the appointed liquidator, Mr Kamal, for a meeting of creditors to be called.  Mr Kamal did not call the meeting and maintained that the notice was given out of time.  Mr Stokjov reasonably pointed out that this was plainly incorrect.  Mr Kamal, despite clearly being in breach of his duty, still refused to call the meeting and later claimed (quite irrelevantly) that the cost of the meeting was not justified.

Sanson v Ebert Construction Limited [2015] NZHC 2402 concerned the successful application by liquidators to set aside payments made pursuant to a direct deed arrangement, as they were payments made on behalf of the insolvent developer. Sanson was the first New Zealand case where a liquidator has raised this argument but it is unlikely to be the last.  Direct deeds are a common contractual tool in construction projects to give financiers the right to step into the place of the developer and directly arrange for payments to the contractor to ensure that t

In King v PFL Finance Limited & Anor [2015] NZCA 517, the Kings, a husband and wife team of farmers, arranged finance from PFL Finance Limited but the loan went into default.  PFL served PLA notices but failed to serve the Kings as guarantors.  A receiver was appointed to the farming operation, who determined to cease trading the day after his appointment.

Frustration amongst creditors of struggling UK law firms continues to grow.  Administrators of Challinors have concluded that the partnership's unsecured creditors, owed approximately £7.1m, are likely to receive nothing.  Meanwhile the Solicitors Regulation Authority (SRA) has advised 141 firms that they must prepare to shut-down following their failure to obtain professional indemnity cover.  These firms are currently in the middle of a 60 day cessation period during which they may remain in business, but cannot accept any new instructions.  While some have blamed the

The applicants in Closegate Hotel Development (Durham) Limited & Anor v McLean & Ors [2013] EWHC 3237 (Ch) were companies that had borrowed money off Barclays Bank to finance a hotel venture.  That funding was secured by floating charges granted by the companies.

A recent ruling by US Federal Judge Rhodes has held that the city of Detroit is eligible to file for bankruptcy under US federal bankruptcy laws and can now attempt to re-organise its US$18.5b debt.

In Madsen-Ries v Rapid Construction Ltd [2013] NZCA 489, the Court of Appeal considered an appeal concerning a liquidator's attempt to have a payment set aside. 

The Australian Corporations Act 2001 provides that a company in liquidation that holds insurance for the benefit of third parties must pay the proceeds of the insurance policy to those third parties in priority to other creditors.  Insurance proceeds payable to third parties under this provision are subject to deductions of "any expenses of or incidental to getting in" those proceeds.  The liquidator of Brighton Hall Securities Pty Ltd sought directions from the court regarding the liquidator's entitlement to deduct his fees and expenses from the insurance proceeds.

In our September 2012 insolvency update, we reported on Re Willmott Forests Ltd [2012] VSC 29, where the Victorian Court of Appeal found that a leasehold interest in land is extinguished by a liquidator's disclaimer of the lease pursuant to section 568(1) of the Australian Corporations Act 2001 (Cth).