Key Points:

Courts will limit an administrator's liability where proposed funding is to be used directly to advance an agenda consistent with the objects of Part 5.3A of the Corporations Act.

A recent decision of the NSW Supreme Court highlights the flexibility of Part 5.3A of the Corporations Act and the ability of administrators to seek orders protecting their interests and facilitating restructures, and was the first stage of what promises to be a novel and challenging administration (In the matter of Nexus Energy Ltd [2014] NSWSC 1041).

Key Points:

A forbearance arrangement is a useful instrument to ensure that both the lender and the customer are aligned on the proposed turnaround or workout.

Key Points:

A Senate Committee has said amendments to Australia's corporate insolvency laws should be considered to encourage and facilitate corporate turnarounds.

The Senate Economics References Committee called for a review of Australia's corporate insolvency laws to ensure they facilitate corporate turnarounds. One suggestion was for the implementation of certain features of the US' Chapter 11 regime into Australia's insolvency laws.

The arguments for changing the insolvency regime

One of the many changes to be implemented as part of the Federal Budget delivered last night was a change to the Fair Entitlements Guarantee (FEG) (previously known as the General Employee Entitlements and Redundancy Scheme or GEERS), which  guarantees certain unpaid employee entitlements in the event of insolvency or bankruptcy of that person's employer.

Key Points:

The NSW Supreme Court says it can provide directions on an administrator's commercial decision on the basis of the liability assumed by administrators and their partners.

In our e-updates of 20 January 2010 and 16 August 2010, we looked at decisions of the English and Scottish courts from December 2009 and August 2010 in which it was decided that, in England and Scotland respectively, the Administrators of a tenant company are bound to account to the landlord of premises for rent due in relation to the period during which those premises are being u

Our government has a longstanding commitment to cutting red tape. One of the ways of doing this it seems is to propose an Act of Parliament running to 153 pages. Thus we are presented with the Deregulation Bill.

A few of the provisions of this Bill relate to insolvency. The most significant are:

Appeal Judges in the Court of Session yesterday issued a decision directing that the liquidators of Scottish Coal Company (SCC) cannot abandon sites or disclaim statutory licences imposing obligations on the company.

Key Points:

For a company to be entitled to subrogation under section 560, it must ensure that it meets the strict requirements of section 560 and does not pay entitlements directly to the relevant company's employees.

A recent overruling by the Supreme Court has revoked the priority status of pension schemes issued with a Financial Support Direction (FSD) or Contribution Notice (CN) by the Pensions Regulator, following an insolvency event. Whilst the decision largely affects companies operating within England and Wales, Scottish Courts are expected to be guided by the ruling.

The 2011 decision