Introduction

In the matter of Mouldpro International Limited (In Liquidation) and in the matter of The Companies Acts 1963 – 2005 the Court of Appeal reduced the fees of the liquidator in respect of three of the four periods of the six-year liquidation of Mouldpro International Limited ("Mouldpro"), finding that the hours claimed for were "neither reasonable nor necessary".

The Western Australian Court of Appeal has ruled that giving security to a Bank does not destroy mutuality for the purposes of statutory set-off if the security allows the debtor to use assets to pay its debts in the ordinary course of business.

Background Facts

In line with measures announced in the 2018 Federal Budget, the government has released a package of proposed insolvency reforms: Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2018, Insolvency Practice Rules (Corporations) Amendment (Restricting Related Creditor Voting Rights) Rules 2018 and accompanying explanatory material, for consultation. Consultation concludes on 27 September.

What happens if you assign your right to litigate to a person or company that is unconnected to the event that creates the right to litigate? In the recent Supreme Court case of SPV Osus Ltd –v- HSBC Institutional Trust Services (Ireland) Limited & Ors [2018] IESC 44, the Supreme Court held that this sort of transaction is void under Irish law and contrary to public policy.

Madoff ponzi scheme litigation

The Patent Office's decision in McCann as Liquidator of ACN 137 233 919 v Molnar [2017] APO 30 explores interesting territory for liquidators and insolvency professionals – the intersection of insolvency and intellectual property.

On 2 October 2015, a company which had gone into liquidation, Sax, filed a request to amend the ownership of a patent application from itself to its sole director, Ms Molnar, pursuant to a sale agreement by which Sax had sold all of its intellectual property to Ms Molnar for $55,000. The Patent Office recorded the amendment on 16 October 2015.

Some of the most far-reaching Australian insolvency law changes are taking effect. These new laws will restrict the enforceability of a whole class of common clauses in contracts –so called 'ipso facto' clauses.

In this edition of FINSights, we explore what these changes mean for financiers, and outline key tips and issues they should consider as we move forward into the new regime.

What are ipso facto clauses?

Introduction

In late 2015, the High Court handed down its decision in Commissioner of Taxation v Australian Building Systems Pty Ltd (in liq) [2015] HCA 48. The High Court held (by a majority of 3:2) that, in the absence of an assessment, a liquidator is not required to retain funds from asset sale proceeds in order to meet a tax liability which could become payable as a result of a capital gain made on the sale. In doing so, the majority of the High Court affirmed the decision of the Full Federal Court and provided long awaited guidance to liquidators, receivers and administrators.