Despite the power to provide directions to Administrators and Liquidators specifically provided in the Corporations Act, one consistent theme arises in the cases – the Courts will not second-guess purely commercial decisions of practitioners.

In Vasudevan v Becon Contructions (Australia) Pty Ltd [2014] VSCA 14, the Victorian Court of Appeal recently delivered a decision which has broadened the scope of an unreasonable director-related transaction under section 588FDA of the Corporations Act 2001 (Cth)(Act). Senior Associate, Elisabeth Pickthall and Associate, Stefano Calabretta discuss the case.

The facts

A recent case involving frozen funds held by American Express in the US has highlighted the difficulty of enforcing freezing orders internationally. In this particular instance, Warren Jiear, Head of Piper Alderman’s Insolvency team, was able to use this to assist liquidator, Blair Pleash of Hall Chadwick, to recover substantial funds owing to an insolvent company.

Finds Bankruptcy Court to be Proper Forum for Claim Objection Despite Forum Selection Clauses in Investor Agreements

The Southern District of New York recently reiterated the critical difference between creditor claims and equity interests in the bankruptcy context.  In a recent opinion arising out of the Arcapita Bank bankruptcy case, the Court was faced with an objection to a proof of claim filed by an investor, Captain Hani Alsohaibi, who characterized his right to recovery against the debtors as being based on a “corporate investment.”

On June 4, 2014, the New York Court of Appeals will hear arguments arising from the bankruptcies of two law firms—Thelen and Coudert Brothers—as to whether the former partners of the bankrupt law firms must turn over profits earned on billable-hour client matters they brought to their new firms.

Following recall notices for its ignition switches in February 2014, General Motors, LLC (“New GM”) has been hit with at least 50 class actions and two individual suits in not less than 20 federal and two state courts asserting claims against New GM for defective vehicles and parts sold by Motors Liquidation Company, formerly known as General Motors Corporation (“Old GM”).

On April 17, 2014, the United States Bankruptcy Judge Sean H. Lane issued an opinion in the Waterford Wedgwood bankruptcy discussing at length one of the defenses available to preference defendants.  The opinion turns upon the scope of “ordinary business terms,” the objective prong of the ordinary course of business defense.

A recent opinion out of the United States Bankruptcy Court for the Eastern District of Virginia (Richmond Division) serves as a reminder to secured creditors to steer clear of conduct that a bankruptcy court may deem inequitable and provide the court with cause to limit the secured creditor’s credit bid rights.  In In re The Free Lance-Star Publishing Co.

In the recent matter of JP Morgan Chase Bank, National Association v Fletcher; Grant Samuel Corporate Finance Pty Ltd v Fletcher [2014] NSWCA 31, the NSW Court of Appeal handed down a decision with important consequences for liquidators and the time they have to commence proceedings for voidable transactions. The decision also illustrates the frequently inconsistent operation of the Corporations Act 2001 (Cth) and Court procedure rules. Senior Associate, Elisabeth Pickthall and Associate, Stefano Calabretta discuss the decision.

In the recent matter of JP Morgan Chase Bank, National Association v Fletcher; Grant Samuel Corporate Finance Pty Ltd v Fletcher [2014] NSWCA 31, the NSW Court of Appeal handed down a decision with important consequences for liquidators and the time they have to commence proceedings for voidable transactions. The decision also illustrates the frequently inconsistent operation of the Corporations Act 2001 (Cth) and Court procedure rules. Senior Associate, Elisabeth Pickthall and Associate, Stefano Calabretta discuss the decision.