This week’s TGIF considers a recent case where a liquidator obtained judicial advice to commence proceedings against a director and related company concerning the unlawful receipt and use of trust money.

Key takeaways

This week’s TGIF considers a recent case where a court ordered that a company’s winding up be stayed, with a view to being terminated, pending payment of the liquidator’s remuneration.

Key takeaways

There is an inherent tension between the goals of bankruptcy law and the state law doctrine of constructive trust. A central tenet of bankruptcy policy is that similarly situated creditors should be treated equally: because an insolvent business or individual will not be able to pay all creditors in full, a proper bankruptcy system must provide as equitable a distribution to each of them as possible. Constructive trust law, on the other hand, works to the advantage of a single creditor – which always means the detriment of the others when everyone is competing for limited funds.