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

Under the Bankruptcy and Insolvency Act1, trustees have considerable discretion to administer a bankrupt’s estate in an expedient manner. However, the British Columbia Court of Appeal recently confirmed that trustees must exercise such discretion within the limits of relevant statutory provisions and common law principles.

I.  Introduction

Canadian restructuring and liquidation legislation provides struggling companies and bankruptcy trustees with powerful tools to restructure their affairs and maximize value for stakeholders. For example, in the right circumstances valuable contracts can be assigned, on notice to the counterparties, to buyers prepared to pay well for the rights conferred under the contracts. In such circumstances, the counterparty’s bargained for right to withhold its consent to an assignment can be effectively overridden by court order.

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.

In the recent matter of JP Morgan Chase Bank, National Association v Fletcher; Grant Samuel Corporate Finance Pty Ltd v Fletcher [2014] NSWCA 31, the NSW Court of Appeal handed down a decision with important consequences for liquidators and the time they have to commence proceedings for voidable transactions. The decision also illustrates the frequently inconsistent operation of the Corporations Act 2001 (Cth) and Court procedure rules. Senior Associate, Elisabeth Pickthall and Associate, Stefano Calabretta discuss the decision.

In the recent matter of JP Morgan Chase Bank, National Association v Fletcher; Grant Samuel Corporate Finance Pty Ltd v Fletcher [2014] NSWCA 31, the NSW Court of Appeal handed down a decision with important consequences for liquidators and the time they have to commence proceedings for voidable transactions. The decision also illustrates the frequently inconsistent operation of the Corporations Act 2001 (Cth) and Court procedure rules. Senior Associate, Elisabeth Pickthall and Associate, Stefano Calabretta discuss the decision.

Bankruptcy trustees should clearly communicate to the bankrupt their intent to make a claim against the non-exempt equity in the bankrupt's property at the time of the assignment into bankruptcy, according to the recent decision of the British Columbia Supreme Court in Re Barter.1 A failure to communicate such an intent may result in the trustee being unable to realize the non-exempt equity or, as in Re Barter, the absolute discharge