Key Points:

The perception of Australia as being a relatively “risky” place to sit on a Board has generally focused on the insolvent trading prohibition in section 588G of the Corporations Act 2001 (Cth) and how it interacts with general directors’ duties.^[1]

Overview

The perception of Australia as a relatively “risky” place to sit on a board, arises in no small part from the insolvent trading prohibition in section 588G of the Corporations Act 2001 (Cth) and how it interacts with general directors’ duties.[1]

The Court of Appeal has resolved previously conflicting case law to confirm that a bankrupt cannot be obliged to crystallise his pension benefits in order to produce income to pay off creditors.

The recent Court of Appeal decision in Rawlinson and Hunter Trustees SA & others v Akers & another [2014] serves to emphasise that third party reports commissioned by liquidators to enable them to consider whether litigation should be commenced in order to make recoveries for the benefit of creditors will not always attract litigation privilege.