The U.S. Bankruptcy Code’s safe harbor provisions provide comfort to financial institutions that transfers made under protected financial contracts will generally not be subject to avoidance or “clawback” if the transferor subsequently files for bankruptcy protection under Chapter 7 or Chapter 11 of the U.S. Bankruptcy Code.

Re Intellicomms Pty Ltd (in liq) [2022] VSC 228

The proceeding was brought by the liquidators of Intellicomms Pty Ltd (the Company) seeking relief in relation to a Sale Agreement dated 2021 between the Company and the defendant, Tecnologie Fluenti Pty Ltd (the Purchaser), involving the sale of certain business assets of the Company to the Purchaser.

Cathro (liquidator), in the matter of Petsamo No 14 Pty Ltd [2022] FCA 399

Bioaction Pty Ltd v Ogborne, in the matter of Bioaction Pty Ltd [2022] FCA 436

Aviation 3030 Pty Ltd (in liq) v Lao, in the matter of Aviation 3030 Pty Ltd (in liq) [2022] FCA 458

Can the remedies available for an unreasonable director-related transaction under section 588FDA of the Corporations Act 2001 (Cth) (Act) be awarded in the case of a solvent company? This was the key legal question in the recent case of Aviation 3030 Pty Ltd (in liq) v Lao, in the matter of Aviation 3030 Pty Ltd (in liq) [2022] FCA 458. Ultimately, Justice Anastassiou answered this question in the affirmative.

¹ The Third Circuit also affirmed a judgment that awarded the senior creditor damages for the misapplication of such collateral proceeds in violation of the intercreditor agreement’s turnover provision.

Morton as liquidator of MJ Woodman Electrical Contractors Pty Ltd v Metal Manufactures Pty Limited [2021] FCAFC 228

The Full Court of the Federal Court confirms that a statutory set-off under s 553C(1) of the Corporations Act2001 (Cth) is not available against a liquidator’s claim for the recovery of an unfair preference under s 588FA of the Act.

Background

On March 15, 2022, the Financial Oversight and Management Board for Puerto Rico announced that the Plan of Adjustment for the Commonwealth of Puerto Rico became effecfive, more than four years aher Puerto Rico commenced restructuring proceedings under Title III of the Puerto Rico Oversight, Management and Economic Stability Act (“PROMESA”). PROMESA is a bespoke piece of federal legislafion enacted in 2016 to address Puerto Rico’s debt crisis, and incorporates most of chapter 9 of the Bankruptcy Code.

ASIC v King [2021] FCA 1610

Background

On December 22, 2021, Judge Mary Walrath of the Bankruptcy Court for the District of Delaware held in In re The Hertz Corp. that redemption premiums may potentially qualify as unmatured interest, and that, to the extent that such redemption premiums are unmatured interest on unsecured debt, then creditors would only be entitled to receive the federal judgment rate, not the contractual rate of interest.