A Supreme Court in Australia has dismissed an application by a UK company’s moratorium restructuring practitioners for recognition of a UK moratorium and ordered that the company be wound up under Australian law.
The decision provides insights into the interaction between cross-border insolvencies and the winding up in Australia of foreign companies under Australian law.
Introduction
In the matter of Hydrodec Group Plc [2021] NSWSC 755, delivered 24 June 2021, the New South Wales Supreme Court:
A recent decision of the Cayman Islands Court of Appeal has confirmed its jurisdiction to hear an appeal of a decision of the Grand Court made pursuant to section 152(1) of the Companies Act (2021) Revision to dissolve a Company following its official liquidation.
Background
The interplay between arbitration and insolvency proceedings has been a recurring theme across common law jurisdictions in recent months. It is therefore timely to consider the conflict between parties' contractual rights to arbitrate and their statutory rights to present a winding up petition and how a balance can be struck when determining which should prevail.
Introduction
It is possible for a trustee in bankruptcy to make a claim to property held by a bankrupt on trust. For example, by lodging a caveat over a home that is held on trust.
A trustee in bankruptcy may be able to make a claim, relying on the bankrupt’s right of indemnity as trustee of the trust. This is because the bankrupt’s right of indemnity, as trustee, is itself property that vests in the trustee in bankruptcy under the Bankruptcy Act 1966.
Explaining a trustee’s right of indemnity
The appointment of joint liquidators can be a useful tool in cross-border insolvency proceedings, particularly when assets are located in a number of jurisdictions. However, courts must ensure that a joint liquidator appointment does not lead to conflicting duties based on the respective laws in each jurisdiction. This was the main issue for consideration in West Bromwich Commercial Ltd v Hatfield Property Ltd, where Jack J was satisfied that the appointment of joint liquidators was necessary.
A recent decision of the Judicial Committee of the Privy Council reaffirms its position that only in rare cases will it be appropriate to interfere with concurrent findings of fact of two lower tribunals.1 The Privy Council found Byers and others v Chen Ningning to be one such case on the basis that an error in findings of fact as to the Respondent’s status as a director had been made by the first instance trial judge and upheld by the Court of Appeal.
Introduction
A recent decision of the Eastern Caribbean Court of Appeal has confirmed that, whilst the courts of the British Virgin Islands (BVI) will recognise the appointment of foreign representatives (including liquidators and trustees in bankruptcy) as having status in the BVI in accordance with his or her appointment by a foreign court, they may only provide assistance to representatives from certain designated countries.
What a creditor needs to know about liquidating GUIDE an insolvent Cayman company
Last reviewed: December 2020
Contents
Introduct ion When is a company insolvent? What is a statutory demand?
A 139ZQ notice issued by the Official Receiver is a powerful tool for trustees in bankruptcy seeking to recover a benefit received by a third party from an alleged void transaction. These include transactions such as an unfair preference, an undervalued transaction, or a transaction to defeat creditors.
Given the adverse consequences for noncompliance, a recipient of a 139ZQ notice should take it seriously and obtain legal advice without delay.
Section 139ZQ notices
Section 561 of the Corporations Act 2001 (Cth) provides that accrued employee entitlements must be paid in priority to the holder of a circulating security interest in a winding up.
Until recently, it was unresolved whether the property subject to a circulating security interest should be determined as at the date the liquidation began, on a continuous basis, or at some other unidentified date.