The peak indebtedness rule employed by liquidators to maximise recovery of unfair preference claims is abolished

A recent case in the NSW Court of Appeal clarifies the purpose, and limits, of a public examination summons

The PAS Group decision reaffirms the principle that rent incurred during the administration period takes priority in the winding-up payment waterfall

Businesses continue to face a challenging environment owing to the global COVID-19 crisis and consequent measures introduced by governments worldwide. The scope and nature of these measures is constantly evolving, with the focus now shifting to an easing of restrictions and facilitating a bounce back of the economy. As part of their response to such measures, businesses will be continuing to look at how best to deal with potential contractual disputes, or considering if some contracts can be terminated.

Antqip Hire highlights the importance of drafting a DOCA carefully, and properly communicating to creditors the commercial risks

The case of Antqip Hire was brought by the liquidators of two related entities (Antqip Pty Limited and Antqip Hire Pty Limited).

Orders were sought determining:

A voluntary administrator is often appointed by the company. The directors have a role in selecting the administrator; often the referral will come through one of the company’s advisers, such as the accountant or lawyer.

National Rugby League (NRL) was successful in setting aside a summons for public examination obtained by the liquidator of Newheadspace Pty Limited (Newheadspace). The Court also awarded NRL its costs. The Court found that the creditors’ voluntary winding-up of Newheadspace was an abuse of process, and that the summonses were obtained for an improper purpose.

Summary

On 14 October 2015, the Court of Appeal overturned a decision that two payments had been made in breach of a freezing order. The order prohibited the respondent to the freezing injunction application from dealing with or disposing of any of its assets other than in the ordinary and proper course of business. The Court held that the judge at first instance had taken too narrow a view in construing this exception and that, in light of the specific facts of the case, the freezing order had not been breached.