In a decision that will likely impact bankruptcy proceedings around the country, the Supreme Court recently denied the petition for writ of certiorari of David Hargreaves, which challenged the equitable mootness doctrine.1 As a result, the concept of equitable mootness remains anything but moot.
The Court at first instance held that the Applicants failed to establish that the Company was insolvent. The key findings that informed the Associate Judge’s conclusions included the following:
- the funds that were available to the Company to pay its debts included funds in an offset account in the name of the director (and an account in the name of the director’s wife); and
- the Applicants’ claims were based on unreconciled accounts of the Company.
The Applicants were granted leave to appeal and appealed the decision of the Court a quo.
The Federal Court has clarified the ability of an assignee of a claim by a liquidator pursuant to s 100-5 of the Insolvency Practice Schedule to rely upon information and documents obtained from a public examination in private proceedings relating to the assigned claim: LCM Operations Pty Ltd, in the matter of 316 Group Pty Ltd (In Liquidation) [2021] FCA 324.
Takeaways:
Shortly after the passage of a bill injecting an additional $310 billion into the Small Business Administration’s Paycheck Protection Program, the SBA has issued another supplemental Interim Final Rule (IFR) providing new guidance on several issues, including eligibility for hedge funds, private equity firms and portfolio companies, and has also answered questions about businesses in bankruptcy proceedings.
On Tuesday 24 March 2020 the Commonwealth Parliament passed emergency laws responding to the COVID 19 Pandemic. [1]
Critically the Government has enacted amendments to the Corporations Act 2001 (Act):
As the CODIV-19 pandemic escalates and the Australian Government implements measures to address the ongoing health crisis, the toll on the Australian economy will increase.
On 13 June 2019, the much anticipated DIFC Insolvency Law No. 1 of 2019 and associated DIFC Insolvency Regulations 2019 (collectively the “2019 DIFC Insolvency Law”), came into full force and effect, replacing the DIFC Insolvency Law No. 3 of 2009.
By way of context, the 2019 DIFC Insolvency Law applies only to entities registered and operating within the DIFC.
In an 8-1 decision, the Supreme Court settled a long-standing circuit split regarding the impact of bankruptcy filings on trademark licenses. Until May 20th, brand owners in some jurisdictions could use bankruptcy protections to terminate the rights of third parties to use its licensed trademarks. Now, it is clear that a bankrupt licensor cannot rescind trademark license rights. Licensees can continue to do whatever their trademark licenses authorize, even if the licensor has filed for bankruptcy.
In 2017, the Alberta Court of Appeal upheld the lower court’s decision that the BIA prevailed over a conflicting provision in the provincial regulations promulgated by the Alberta Energy Regulator (AER).
On January 17, 2019, the Fifth Circuit held that a creditor is not impaired for the purpose of voting on a plan if it is the Bankruptcy Code (as opposed to plan treatment) that impairs a creditor’s claim. The court further held that a make-whole premium is a claim for unmatured interest which is not an allowable claim under Bankruptcy Code, absent application of the “solvent-debtor” exception which may or not apply—the issue was remanded to the bankruptcy court for decision.