In August I presented on cross-border insolvency at the joint Federal Court of Australia and Law Council of Australia conference on corporations law. The audience consisted of over 30 Federal Court judges and a range of other experienced corporate and insolvency lawyers.
The tension between a trustee seeking to facilitate a proposal for the benefit of all creditors and a single creditor being forced to release its rights for the “greater good” was front and center in a recent case before the Supreme Court of British Columbia.
There have been recent reports that APR Energy PLC has threatened the Australian Government with a demand for $200 million in damages based on a claim under the Australia-United States Free Trade Agreement after it lost its security interest in multi-million dollar wind turbines it leased to an Australian company due to the operation of a provision in the Personal Property Securities Act 2009 (Cth) (PPSA).
On Friday 7 October 2016, McCullough Robertson successfully obtained orders on behalf of a US Chapter 7 bankruptcy trustee, requiring payment to her of money held by the Public Trustee of Queensland (Public Trustee) on behalf of a US bankrupt and her former husband. As far as we know, this is the first time that the Model Law on Cross-Border Insolvency (Model Law) has been used in Australia to obtain an order allowing the repatriation of funds to a foreign representative that are not the foreign debtor’s assets.
Last year’s Queensland District Court decision in Morton v Rexel Electrical Supplies Pty Ltd [2015] QDC 49 (Rexel) caused quite a stir in insolvency circles. In Rexel, Searles DCJ (a former partner of McCullough Robertson) found that section 553C of the Corporations Act 2001 (Cth) (Act) could apply to reduce an unfair preference claim brought by a liquidator, by allowing the amount still owing by the company to be set-off against the liquidator’s claim.
Last month former Kleenmaid director Bradley Young not so valiantly marched into the history books when found guilty of 17 charges of insolvent trading and one count of fraud after one of the longest criminal trials ever held in Queensland. This followed fellow director, Gary Armstrong, pleading guilty to two counts of insolvent trading and one count of fraud.
Shipping companies world-wide are suffering from depressed freight rates caused by years of weakening demand—particularly from China—as global trade has slowed. The latest casualty is one of the largest to date, South Korea’s Hanjin Shipping (Hanjin), the country's largest shipping firm and the world's seventh-biggest container carrier, which was placed into receivership by a South Korean court on Wednesday after its financiers ended financial support.
A recent decision of the Ontario Superior Court of Justice serves as a reminder for secured lenders of the importance of perfecting a security interest by registration. Absent perfection, collateral is at risk of seizure by judgment creditors of the borrower. Perfection, however, insures that a creditor has a priority interest in collateral over any subsequent judgment creditor. The decision also shows the importance to vendors of conducting continuous diligence on customers when credit is being extended on a regular basis.
Backround
On October 7, 2015, the British Columbia Court of Appeal reversed the Supreme Court of British Columbia's decision in Barafield Realty Ltd. v. Just Energy (B.C.) Limited Partnership ["Barafield Realty"].1 In July of 2014, we wrote the attached bulletin http://www.mcmillan.ca/Assigning-contracts-in-Canadian-insolvency-proceedings on the lower court decision.
As discussed in our May 2016 bulletin, New Rules for Asset Sales by Insolvent Producers (at least for now), the decision of the Court of Queen's Bench of Alberta in Re Redwater Energy Corporation, 2016 ABQB 278 ("Redwater") determined that provisions of the provincial legislation governing the actions of licensees of oil and gas assets did not apply to receivers and trustees in bankruptcy of insolvent companies, given the paramountcy of the Bank