In August I presented on cross-border insolvency at the joint Federal Court of Australia and Law Council of Australia conference on corporations law. The audience consisted of over 30 Federal Court judges and a range of other experienced corporate and insolvency lawyers.
The English courts have been careful to control the circumstances in which a constructive trust will be declared.
Introduction
There have been recent reports that APR Energy PLC has threatened the Australian Government with a demand for $200 million in damages based on a claim under the Australia-United States Free Trade Agreement after it lost its security interest in multi-million dollar wind turbines it leased to an Australian company due to the operation of a provision in the Personal Property Securities Act 2009 (Cth) (PPSA).
On Friday 7 October 2016, McCullough Robertson successfully obtained orders on behalf of a US Chapter 7 bankruptcy trustee, requiring payment to her of money held by the Public Trustee of Queensland (Public Trustee) on behalf of a US bankrupt and her former husband. As far as we know, this is the first time that the Model Law on Cross-Border Insolvency (Model Law) has been used in Australia to obtain an order allowing the repatriation of funds to a foreign representative that are not the foreign debtor’s assets.
Court holds Bankrupt cannot be forced to draw scheme benefits to pay creditors
In its judgment in Horton v Henry the Court of Appeal has held that where a bankrupt member has acquired a right to draw benefits, but has not yet done so (a) his rights under the scheme are not "income" over which the court can make an income payments order under section 310 of the Insolvency Act 1986; and (b) the trustee in bankruptcy cannot compel the member to take his benefits.
Background
Last year’s Queensland District Court decision in Morton v Rexel Electrical Supplies Pty Ltd [2015] QDC 49 (Rexel) caused quite a stir in insolvency circles. In Rexel, Searles DCJ (a former partner of McCullough Robertson) found that section 553C of the Corporations Act 2001 (Cth) (Act) could apply to reduce an unfair preference claim brought by a liquidator, by allowing the amount still owing by the company to be set-off against the liquidator’s claim.
Last month former Kleenmaid director Bradley Young not so valiantly marched into the history books when found guilty of 17 charges of insolvent trading and one count of fraud after one of the longest criminal trials ever held in Queensland. This followed fellow director, Gary Armstrong, pleading guilty to two counts of insolvent trading and one count of fraud.
Shipping companies world-wide are suffering from depressed freight rates caused by years of weakening demand—particularly from China—as global trade has slowed. The latest casualty is one of the largest to date, South Korea’s Hanjin Shipping (Hanjin), the country's largest shipping firm and the world's seventh-biggest container carrier, which was placed into receivership by a South Korean court on Wednesday after its financiers ended financial support.
Third Parties (Rights Against Insurers) Act 2010: in force from 1 August 2016
In August 2016 significant changes to English insurance law will take effect.
On 1 August 2016 the Third Parties (Rights Against Insurers) Act 2010 (the 2010 Act) will come into force. The 2010 Act will be swiftly followed by the Insurance Act 2015, which will come into force on 12 August 2016.
Third Parties (Rights Against Insurers Act) 2010
MPs' Report on the financial collapse of BHS: what are the key pensions implications?
MPs have published a report on the events leading to the financial collapse of BHS shortly after its sale by Sir Philip Green. As a consequence of BHS's insolvency, its defined benefit pension schemes will enter the PPF.