In Australian Building Systems Pty Ltd v Commissioner of Taxation [2014] FCA 116, the Federal Court held that liquidators do not have an obligation to retain an amount for the payment of tax of a portion of the proceeds from the sale of property owned by the company before liquidation when no tax assessment has been issued. However, Justice Logan made clear that a prudent liquidator would be entitiled to retain the gain until an advice or assessment from the Commissioner, was issued.
Background
The recent case of Young, Jr, in the matter of Buccaneer Energy Limited v Buccaneer Energy Limited [2014] FCA 711 considered the concept of “the centre of main interests”, described in the Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade Law (United Nations General Assembly Resolution A/RES/52/158 (1997)). Senior Associate, Sarah Drinkwater and Associate, Tim Logan discuss.
Application
Crumbs Bake Shop Inc. shut down in July and filed for bankruptcy in New Jersey court that same month. The bankruptcy court ordered an auction sale, and a purchaser has come forward to buy all of the company’s assets.
A class of consumers suing the bankrupt Kangadis Food Inc. over its allegedly misleading olive oil purity claims is now suing the owners of the company in a separate class action aimed at holding them accountable.
Gupta’s $13.9 Million SEC Insider Trading Penalty Affirmed
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.
The case of Executive Benefits Insurance Agency v. Arkison (In re Bellingham Ins. Agency), No. 12- 1200, was easily one of the most closely watched bankruptcy cases in many years. Last week’s decision in that case, however, was far less dramatic than some practitioners feared it might be. The Supreme Court answered two important questions regarding the power of bankruptcy courts that it left open three years ago in Stern v. Marshall.
The staff of the Federal Trade Commission’s Bureau of Consumer Protection recently sent a letter to the court handling ConnectEdu’s bankruptcy proceedings and sale of assets, which may include their customer’s personal information.