We are excited to share the inaugural edition of R+I In Brief, where we explore the past year of developments in the Australian restructuring and insolvency industry and provide our thoughts on the year ahead.
The 2023 edition of R+I In Brief includes a collection of articles and case notes we have prepared as well as some further commentary on issues we consider pertinent to the restructuring and insolvency industry.
It is broken up into three parts:
In this Part of the 2023 edition of R+I In Brief, we delve into significant judicial developments relating to insolvency law, including:
Part 1 of the 2023 edition of R+I In Brief explores restructuring and insolvency developments in Australia in FY22/23.
Overview
Despite the challenges flowing from increasing global inflation and supply chain disruptions, the Australian economy has to date remained resilient and a technical recession has been avoided in 2023. However, after many years of historically low interest rates, the Reserve Bank of Australia raised interest rates rapidly from April 2022 (12 rate rises and counting) as inflation became uncontrollable.
This Part of the 2023 edition of R+I In Brief provides key industry and sector insights relating to the restructuring space over the past year. These hot topics include:
Introduction
In a previous article, 'In case of emergency: Using emergency power provisions to appoint a voluntary administrator' we discussed the use of emergency powers in a company’s constitution to appoint a voluntary administrator to a company, as well as the use of court assistance to cure defects in an appointment.
Corporate Australia is bracing for the long-awaited surge in insolvencies. As Australia’s largest creditor and, according to creditor reporting bureau Creditor Watch, responsible for the greatest number of company windups prior to the pandemic in 2019, the ATO can fairly be described as an influential, if not dominant, player in the restructuring and turnaround space and in corporate Australia more broadly.
The ATO effect
The High Court decision in Re All Star Leisure (Group) Limited (2019), which confirmed the validity of an administration appointment by a qualified floating charge holder (QFCH) out of court hours by CE-Filing, will be welcomed.
The decision accepted that the rules did not currently provide for such an out of hours appointment to take place but it confirmed it was a defect capable of being cured and, perhaps more importantly, the court also stressed the need for an urgent review of the rules so that there is no doubt such an appointment could be made.
In certain circumstances, if a claim is proven, the defendant will be able to offset monies that are due to it from the claimant - this is known as set off.
Here, we cover the basics of set off, including the different types of set off and key points you need to know.
What is set off?
Where the right of set off arises, it can act as a defence to part or the whole of a claim.
In our update this month we take a look at some recent decisions that will be of interest to those involved in insolvency litigation. These include: