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 economic fallout from the COVID-19 pandemic will leave in its wake a significant increase in commercial chapter 11 filings. Many of these cases will feature extensive litigation involving breach of contract claims, business interruption insurance disputes, and common law causes of action based on novel interpretations of long-standing legal doctrines such as force majeure.
U.S. Bankruptcy Judge Dennis Montali recently ruled in the Chapter 11 case of Pacific Gas & Electric (“PG&E”) that the Federal Energy Regulatory Commission (“FERC”) has no jurisdiction to interfere with the ability of a bankrupt power utility company to reject power purchase agreements (“PPAs”).
The Supreme Court this week resolved a long-standing open issue regarding the treatment of trademark license rights in bankruptcy proceedings. The Court ruled in favor of Mission Products, a licensee under a trademark license agreement that had been rejected in the chapter 11 case of Tempnology, the debtor-licensor, determining that the rejection constituted a breach of the agreement but did not rescind it.