Many cryptocurrency lenders have declared bankruptcy. These loss events are indicators of the significant losses the cryptocurrency market has experienced this year.

For investors who have suffered, an important consideration is how to capitalize on these losses. Accordingly, this article will analyze the recent Celsius Network (“Celsius”) bankruptcy and the tax strategy of writing off bad debt.

The Celsius Bankruptcy

T W Timber Treatment Pty Ltd v Giddings [2022] VSCA 147

The Victorian Court of Appeal has re-affirmed that a director’s signature can indicate an intention to personally guarantee a company’s obligations, even where that signature is qualified and accompanied by contrary indications in the signed document.

The Court also confirmed that a creditor’s rights under a director’s guarantee, including a right to interest, are not affected by a Deed of Company Arrangement (DOCA).

Background

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.

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

ASIC v King [2021] FCA 1610

Background

Introduction

Carna Group Pty Ltd v The Griffin Coal Mining Company (No 6) [2021] FCA 1214

In Carna Group Pty Ltd v The Griffin Coal Mining Company (No 6) [2021] FCA 1214, McKerracher J considered the meaning of “insolvent” within the context of a commercial contract and relevantly found that: