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

One difficulty encountered by creditors and trustees in bankruptcy is the use of one or more aliases by a bankrupt. Whether it is an innocent use of a nickname or an attempt to conceal one's identity, the use of an alias can often create problems for creditors seeking to pursue debts and for trustees seeking to recover assets held by a bankrupt.

How does it happen?

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?

Suppliers of goods often rely upon retention of title clauses to preserve their goods in the event the purchaser defaults on any aspect of the supply agreement.  However, how enforceable are these provisions when the purchaser enters into administration or liquidation or becomes bankrupt?  What steps can suppliers take to protect their interests in these circumstances?

As concerns about illegal phoenix activity continue to mount, it is worth remembering that the Corporations Act gives liquidators and provisional liquidators a powerful remedy to search and seize property or books of the company if it appears to the Court that the conduct of the liquidation is being prevented or delayed.

When a person is declared a bankrupt, certain liberties are taken away from that person. One restriction includes a prohibition against travelling overseas unless the approval has been given by the bankrupt's trustee in bankruptcy. This issue was recently considered by the Federal Court in Moltoni v Macks as Trustee of the Bankrupt Estate of Moltoni (No 2) [2020] FCA 792, which involved the Federal Court's review of the trustee's initial refusal of an application by a bankrupt, Mr Moltoni, to travel to and reside in the United Kingdom.

On 24 March 2020, the Coronavirus Economic Response Package Omnibus Bill 2020 received Royal Assent, meaning that the changes proposed in that bill to "lessen the threat of insolvency" for individuals and businesses in the current coronavirus pandemic have now become law. The changes will be in place for a period of six months starting from today and ending on 25 September 2020, unless this grace period is extended in the future.

By way of summary, the legislative changes involve the following measures:

As part of its second stimulus package in response to the developing novel coronavirus pandemic announced on 22 March 2020, the Australian Government has extended a lifeline to individuals and businesses facing financial distress by way of temporary changes to the laws of insolvency. There are four key features of the changes.

1. Temporary changes to creditor's statutory demands laws

With the rampant spread of COVID-19 worldwide, there are increasing concerns as to the financial impact of the outbreak. With forced business closures a potential reality, it seems inevitable that the Australian economy is on its way to a recession.

It is therefore critical that directors of companies are fully aware of the extent of their duties and understand what they must do to comply.