The Bankruptcy Act 1966 (Cth) (the Act) provides a regime by which a debtor can compromise with his/her creditors outside formal bankruptcy. The provisions are found in Part X (Personal Insolvency Agreements) and Part IX (Debt Agreements) of the Act.

DEBT AGREEMENTS

The High Court has recently clarified what is required for the creation of an express trust (Korda & Ors v Australian Executor Trustees (SA) Ltd [2015] HCA 6 (Korda)).

To be effective, express trusts must satisfy the three certainties of intention, subject matter and object. That is:

CLARITY OF INTENTION KEY TO CREATION OF EXPRESS TRUSTS: A WIN FOR RECEIVERS 

The High Court has recently clarified what is required for the creation of an express trust (Korda & Ors v Australian Executor Trustees (SA) Ltd [2015] HCA 6 (Korda)).

To be effective, express trusts must satisfy the three certainties of intention, subject matter and object. That is:

SUMMARY

The Full Court of the Federal Court of Australia have confirmed that a judgment on assessed costs is a final orders for the purposes of the Bankruptcy Act 1966 (Cth) (Act), and therefore that a costs order can ground a bankruptcy notice for the purposes of the Act.

THE PERILS OF AMBIGUITY IN BANKRUPTCY NOTICES

The Bankruptcy Act ('the Act') is prescriptive as to the form and content of bankruptcy notices. Courts have often observed that close observance of the rules is necessary in light of the serious consequences faced by debtors upon bankruptcy and failure to do so may result in the notices being rendered invalid.

ABILITY TO SEEK AN EXTENSION OF TIME

Section 588FF(3) of the Corporations Act 2001 (the Act) provides liquidators with a mechanism by which to obtain an extension of time within which proceedings against the recipients of voidable transactions may be commenced.

The ability to "surcharge" a secured creditor's collateral in bankruptcy is an important resource available to a bankruptcy trustee or chapter 11 debtor in possession ("DIP"), particularly in cases where there is little or no equity in the estate to pay administrative costs, such as the fees and expenses of estate-retained professionals. However, as demonstrated by a ruling handed down by the Third Circuit Court of Appeals, the circumstances under which collateral may be surcharged are narrow. In In re Towne, Inc., 2013 BL 232068 (3d Cir. Aug.

Section 506(a) of the Bankruptcy Code contemplates bifurcation of a debtor's obligation to a secured creditor into secured and unsecured claims, depending on the value of the collateral securing the debt. The term "value," however, is not defined in the Bankruptcy Code, and bankruptcy courts vary in their approaches to the meaning of the term. In In re Heritage Highgate, Inc., 679 F.3d 132 (3d Cir.

The ability to sell an asset in bankruptcy free and clear of liens and any other competing “interest” is a well-recognized tool available to a trustee or chapter 11 debtor in possession (“DIP”). Whether the category of “interests” encompassed by that power extends to potential successor liability claims, however, has been the subject of considerable debate in the courts. A New York bankruptcy court recently addressed this controversial issue in Olson v. Frederico (In re Grumman Olson Indus., Inc.), 445 B.R. 243(Bankr. S.D.N.Y. 2011).