An appeal “of considerable importance for company law” in the UK could affect Australian directors' duties.

In Australia, the existence of a duty to consider the interests of creditors principally arises in the context of the fiduciary duty of directors to act in the best interests of the company. That duty finds expression in section 181(1) of the Corporations Act 2001 (Cth): a director or other officer of a corporation must exercise their powers and discharge their duties in good faith in the best interests of the corporation and for a proper purpose.

Australia has now entered its first recession in 29 years, and the Australian Government has implemented a number of legislative reforms and other initiatives to support and provide temporary relief to businesses, including stimulus payments, enhanced asset write-off and flexibility in the application of the Corporations Act 2001 (Cth).

(Bankr. S.D. Ind. Dec. 4, 2017)

The bankruptcy court grants the motion to dismiss, finding the defendant’s security interest in the debtor’s assets, including its inventory, has priority over the plaintiff’s reclamation rights. The plaintiff sold goods to the debtor up to the petition date and sought either return of the goods delivered within the reclamation period or recovery of the proceeds from the sale of such goods. Pursuant to 11 U.S.C. § 546(c), the Court finds the reclamation rights are subordinate and the complaint should be dismissed. Opinion below.

(Bankr. E.D. Ky. Nov. 22, 2017)

(B.A.P. 6th Cir. Nov. 28, 2017)

The Sixth Circuit B.A.P. affirms the bankruptcy court’s dismissal of the Chapter 12 bankruptcy case. The court finds that the bankruptcy court failed to give the debtor proper notice and opportunity to be heard prior to the dismissal. However, the violation of due process was harmless error. The delay in filing a confirmable plan and continuing loss to the estate warranted the dismissal. Opinion below.

Judge: Preston

Attorney for Appellant: Heather McKeever

(6th Cir. Nov. 14, 2017)

(Bankr. W.D. Ky. Nov. 1, 2017)

The bankruptcy court grants the creditor’s motion for stay relief to proceed with a state court foreclosure action. The creditor had obtained an order granting stay relief in a prior bankruptcy filed by the debtor’s son, the owner of the property. The debtor’s life estate interest in the property does not prevent the foreclosure action from proceeding. Opinion below.

Judge: Lloyd

Attorney for Debtor: Mark H. Flener

Attorney for Creditor: Bradley S. Salyer

The Sixth Circuit affirms the B.A.P., holding the entry of summary judgment in favor of the creditors in the nondischargeability action was appropriate. The creditors obtained a default judgment against the debtor in Tennessee state court. The default judgment was on the merits and the doctrine of collateral estoppel applied. Opinion below.

Judge: Rogers

Appellant: Pro Se

Attorneys for Creditors: Keating, Muething & Klekamp, Joseph E. Lehnert, Brian P. Muething, Jason V. Stitt

(Bankr. E.D. Ky. Nov. 1, 2011)

(Bankr. S.D. Ind. Oct. 20, 2017)

The bankruptcy court dismisses the debtor’s complaint against the lender, which asserted claims related to the lender’s foreclosure of its mortgage lien in state court. The court dismisses the stay violation claim, because the property was not property of the estate at the time of the alleged acts, and dismisses the remaining claims because the court lacks subject-matter jurisdiction. Opinion below.

Judge: Carr

Attorney for Debtor: Sawin, Shea & Des Jardines LLC, J. Andrew Sawin