In a recent case, the Victorian Supreme Court said that an accountant ‘would know well that a statutory demand involves strict time frames for response and potentially very significant consequences for a company’. The accountant failed to take appropriate steps to inform the company of the statutory demand.
The statutory demand process
If a company does not comply with a statutory demand within 21 days of service, it is deemed to be insolvent and the creditor may proceed to wind up the company.
A recent court decision considers the legal principles and sufficiency of evidence when a court-appointed receiver seeks approval of their remuneration.
A court-appointed receiver needs court approval for the payment of their remuneration. The receiver has the onus of establishing the reasonableness of the work performed and of the remuneration sought.
The Moveable Transactions (Scotland) Bill aims to modernise and simplify the process for taking fixed security over moveable assets in Scotland.
Once enacted, Insolvency Practitioners (IPs) may begin to see real changes in certain aspects of the management of formal insolvency processes in Scotland. This insight sets out a high-level summary of the potential impact of the Bill for IPs if enacted in its present form.
1. Additional opportunities for refinancing
Insolvency Practitioners should be alert to the potential impact of new and proposed corporate transparency measures.
Companies House reform and the new Register of Overseas Owners of UK Property will be largely welcomed, providing more in depth access to more reliable information which will support IPs when carrying out their duties. However, some of the insolvency specific details are yet to be confirmed and IPs will want to watch this space. We have set out a high level summary of the forthcoming changes below.
A Supreme Court in Australia has dismissed an application by a UK company’s moratorium restructuring practitioners for recognition of a UK moratorium and ordered that the company be wound up under Australian law.
The decision provides insights into the interaction between cross-border insolvencies and the winding up in Australia of foreign companies under Australian law.
Introduction
In the matter of Hydrodec Group Plc [2021] NSWSC 755, delivered 24 June 2021, the New South Wales Supreme Court:
After a period of significant inactivity as a result of the various temporary measures introduced during the pandemic, we are now approaching an insolvency cliff edge in the UK. In this video, senior restructuring and insolvency lawyers from TLT’s Scottish, Northern Irish and English offices discuss:
It is possible for a trustee in bankruptcy to make a claim to property held by a bankrupt on trust. For example, by lodging a caveat over a home that is held on trust.
A trustee in bankruptcy may be able to make a claim, relying on the bankrupt’s right of indemnity as trustee of the trust. This is because the bankrupt’s right of indemnity, as trustee, is itself property that vests in the trustee in bankruptcy under the Bankruptcy Act 1966.
Explaining a trustee’s right of indemnity
A 139ZQ notice issued by the Official Receiver is a powerful tool for trustees in bankruptcy seeking to recover a benefit received by a third party from an alleged void transaction. These include transactions such as an unfair preference, an undervalued transaction, or a transaction to defeat creditors.
Given the adverse consequences for noncompliance, a recipient of a 139ZQ notice should take it seriously and obtain legal advice without delay.
Section 139ZQ notices
Section 561 of the Corporations Act 2001 (Cth) provides that accrued employee entitlements must be paid in priority to the holder of a circulating security interest in a winding up.
Until recently, it was unresolved whether the property subject to a circulating security interest should be determined as at the date the liquidation began, on a continuous basis, or at some other unidentified date.
It is unresolved whether a creditor can rely upon a section 553C set-off under the Corporations Act 2001 (Cth) to reduce an unfair preference claim. Until the controversy is resolved by a binding court decision, liquidators and creditors will continue to adopt opposing positions.