A recent Federal Court decision has provided some useful insights on how related party loans will be considered in an insolvency context, particularly in relation to unreasonable director-related claims against directors and their relatives. For insolvency practitioners it also provides insight into how the assignment of claims might effectively be used to mitigate litigation risks.

Introduction

Two recent cases from New Zealand demonstrate how an equitable lien can arise in insolvency to elevate the interest of unsecured purchasers of goods to secured status.

Key takeouts

On 22 Sept 2023, the Australian government responded to the Whittaker Review, releasing the Personal Property Securities Amendment Bill 2023 for public consultation until 17 Nov 2023.

Overview of the Whittaker review and Government's response

Liquidators and creditors should be aware of the High Court's analysis of the limits of set-off under s 553C of the Corporations Act 2001 (Cth).

The economic impacts of COVID-19 are unexpected and significant. While the Australian Government has announced a number of temporary reforms to address these impacts, there remains risk for directors of companies that are unable to pay their debts as and when they are due. 

On 19 June 2019, the High Court delivered its much anticipated decision in Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth [2019] HCA 20.

The High Court of Hong Kong refused to allow a Chapter 11 Trustee to disclose a Decision from Hong Kong winding up proceedings in the US bankruptcy court. The US proceedings were commenced to prevent a creditor from taking action following a breach of undertakings given to the Hong Kong court in circumstances where the company had no jurisdictional connection with the US.

Following our previous article, the Court of Appeal dismissed an appeal following the High Court deciding that a moratorium in relation to restructuring proceedings in Azerbaijan could not be extended in breach of the Gibbs rule, allowing two significant creditors to proceed with their claims in the English Courts.

Despite the debtor's contention that his primary residence was in the United States, the Court held that it had jurisdiction to make a Bankruptcy Order following a petition presented by HMRC.

HMRC presented a bankruptcy petition against Robert Stayton on 30 May 2014 who owed approximately £653,640. The matter came before the court on a number of occasions before the final hearing, with judgment being handed down in November 2018.

A discharged Bankrupt had intentionally misled the Court as to his COMI being in England and Wales in order to obtain a Bankruptcy Order. Four years after the making of the Bankruptcy Order, the Court annulled it on the grounds that the Court did not have jurisdiction to make the Order in the first place.