On 28 March 2017, the Australian Government announced its proposals to reform the law relating to insolvent trading, and the right to terminate contracts based on insolvency ('ipso facto clauses'). MinterEllison made a detailed submission on the proposals which can be found here.
Historically, German insolvencies have been perceived as extremely unattractive, particularly because they were dominated by court-appointed bankruptcy administrators, with limited to no influence for creditors. This has, however, significantly changed over the last years. In that respect, it was the clearly expressed intention of the German legislature to make insolvencies more attractive for all parties involved. However, the available powerful features are often still unknown and hence not used, in particular by foreign investors.
On 31 January 2017, the Supreme Court of New South Wales handed down judgment in In the matter of OneSteel Manufacturing Pty Limited (administrators appointed). This important decision highlights the severe consequences that may follow from seemingly innocuous mistakes made when registering security interests.
On 28 March 2017, the Australian Government announced its proposals to reform the law relating to insolvent trading, and the right to terminate contracts based on insolvency ('ipso facto clauses').
Maxcon Constructions Pty Ltd v Vadasz (No 2)
Significance
Introduction
The Federal Court of Australia has handed down a decision that is a salutary reminder to directors that, in any corporate tax planning, it is important not to miss the forest for the trees. In a recent Federal Court of Australia decision, contentious tax planning was found to constitute a breach of directors’ duties for the directors involved, resulting in them becoming personally liable for ATO debts of the company.
What happened?
I sense a sea change in the recent Delaware decision in Intervention Energy Holdings, LLC, 2016 WL 3185576 (6/3/16), refusing to enforce a bankruptcy proofing provision of a Delaware LLC’s operating agreement. Until recently, the trend had been to accept the fundamental principles of bankruptcy remoteness, although courts sometimes found ways to avoid honoring anti-bankruptcy devices in specific cases.
Late last year, the High Court handed down its decision in Commissioner of Taxation v Australian Building Systems Pty Ltd (in liq) [2015] HCA 48. The High Court held (by a majority of 3:2) that, in the absence of an assessment, a liquidator is not required to retain funds from asset sale proceeds in order to meet a tax liability which could become payable as a result of a capital gain made on the sale.