Last year’s Queensland District Court decision in Morton v Rexel Electrical Supplies Pty Ltd [2015] QDC 49 (Rexel) caused quite a stir in insolvency circles. In Rexel, Searles DCJ (a former partner of McCullough Robertson) found that section 553C of the Corporations Act 2001 (Cth) (Act) could apply to reduce an unfair preference claim brought by a liquidator, by allowing the amount still owing by the company to be set-off against the liquidator’s claim.
Last month former Kleenmaid director Bradley Young not so valiantly marched into the history books when found guilty of 17 charges of insolvent trading and one count of fraud after one of the longest criminal trials ever held in Queensland. This followed fellow director, Gary Armstrong, pleading guilty to two counts of insolvent trading and one count of fraud.
Shipping companies world-wide are suffering from depressed freight rates caused by years of weakening demand—particularly from China—as global trade has slowed. The latest casualty is one of the largest to date, South Korea’s Hanjin Shipping (Hanjin), the country's largest shipping firm and the world's seventh-biggest container carrier, which was placed into receivership by a South Korean court on Wednesday after its financiers ended financial support.
WHO SHOULD READ THIS
- Industry participants in the construction sector.
THINGS YOU NEED TO KNOW
- The deadline for comments on the Improving Bankruptcy and Insolvency Laws Proposals Paper is 27 May 2016.
WHAT YOU NEED TO DO
The NSW Supreme Court recently handed down its decision in Re HIH Insurance Limited (In Liq)[1]. This long-running saga began with the collapse 15 years ago of Australia’s (then) second largest insurance company, HIH Insurance Limited, and has since seen a royal commission, the imprisonment of various senior management figures, and losses totalling more than $5 billion.
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.