Important Features of this Judgment
- A Pt X Deed may create an equitable assignment of the rights, such that obligations continue after the Deed has come to an end.
- The Trustee of the Part X Deed of Arrangement can continue the proceedings initiated against One.Tel, despite the Deed coming to an end.
- Serves as a reminder that the enforceability of the debt does notaffect a debtor’s liability.
Facts
The Australian Securities and Investments Commission (ASIC) has released Regulatory Guide 217 (RG 217) to assist directors in understanding and complying with their duty to prevent insolvent trading under the Corporations Act 2001 (Cth) (the Act). It should be noted from the outset that ASIC regulatory guides indicate ASIC’s policy on specific issues, they do not have legislative force or constitute legal advice. Insolvent trading involves complex legal and accounting issues and it is therefore recommended that you seek professional advice to find out how the Act may apply to you.
An increasing number of restructuring cases involve several creditors with security over varied assets or asset classes. In such cases there is often a dispute over allocation of the costs of the reorganization. This is particularly true in failed restructurings where costs are high and realizations are low.
Law clerk, Myles Engelen, discusses the decision of the Supreme Court of New South Wales, in McGrath & Anor re HIH Insurance Ltd approving a proposal to use excess assets of some members of the group to fund claims by the group members.
Ontario Court Stays Retaliatory Action brought against Bank
Financial institutions seeking to enforce a debt or guarantee through bankruptcy or other court proceedings are sometimes faced with meritless retaliatory court actions brought by debtors attempting to frustrate or further delay payment. In general, Ontario courts will not compel parties to litigate the same dispute on multiple fronts. Instead, one proceeding will be temporarily stayed pending resolution of the other where the same core issues are raised in both.
As foreshadowed earlier this year, on 2 June 2010 the Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen MP introduced the Corporations Amendment (Sons of Gwalia) Bill 2010. Associate, Justin Le Blond summarises the Bill.
The proposed amendments in the Bill will return the order of claims in a corporate winding-up to the situation that was commonly understood to exist prior to the Sons of Gwalia judgment. That is, priority will be given to creditors ahead of shareholders in granting access to the equity of an insolvent company.
This is the second of a series of articles that will examine the impact of the Personal Property Securities Act 2009 on specific business sectors. In this article Corporate Lawyer, Llon Riley deals with the impact of the PPSA on leasing or hiring equipment.
Insolvency Partner, Amanda Banton and Lawyer, Anna MacFarlane summarise the High Court’s judgment delivered on 14 April 2010 in which the Court held, as the Full Court of the Federal Court held in first instance, that, properly construed, Pt 5.3A of the Corporations Act (Cth) 2001 does not permit third-party releases within DOCAs.
The important features of the judgment:
If you intend to enforce a judgement in Canada, you should know that the question of the US Court’s jurisdiction will likely be determined by the Canadian Court enforcing the judgement using its own test. The grounds on which the US Court took jurisdiction will carry little weight in the eyes of the Canadian enforcing Court.