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.

Until 2013, no circuit court of appeals had weighed in on the implications of the U.S. Supreme Court’s pronouncement in the 203 North LaSalle case that property retained by a junior stakeholder under a cram-down chapter 11 plan in exchange for new value “without benefit of market valuation” violates the “absolute priority rule.” See Bank of Amer. Nat’l Trust & Savings Ass’n v. 203 North LaSalle Street P’ship, 526 U.S. 434 (1999), reversing Matter of 203 North LaSalle Street P’ship, 126 F.3d 955 (7th Cir. 1997).

2012 is shaping up as a year of bankruptcy first impressions for the Ninth Circuit. The court of appeals sailed into uncharted bankruptcy waters twice already this year in the same chapter 11 case. On January 24, the court ruled in In re Thorpe Insulation Co., 2012 WL 178998 (9th Cir. Jan. 24, 2012) ("Thorpe I"), that an appeal by certain nonsettling asbestos insurers of an order confirming a chapter 11 plan was not equitably moot because, among other things, the plan had not been "substantially consummated" under the court's novel construction of that statutory term.