On June 4, 2018, the U.S. Supreme Court decided the case of Lamar, Archer & Cofrin, LLP v. Appling, No. 16-1215, which dealt with the dischargeability of debt in bankruptcy proceedings. The Court held that a statement about a single asset can be a “statement respecting the debtor’s financial condition” under section 523(a)(2) of the Bankruptcy Code.

Background Facts

In a recent opinion, the U.S. Court of Appeals for the Sixth Circuit (the “Court”) ruled that penalties assessed by the state of Michigan against two debtors, stemming from fraud associated with the wrongful receipt of Michigan unemployment benefits, are non-dischargeable in Chapter 13 bankruptcy pursuant to Bankruptcy Code § 523(a)(2).1

Background Facts

The entitlement to recover remuneration and costs for work performed in conducting an external administration is an ever-present fundamental concern for insolvency practitioners.

Key Summary

The Full Court of the Federal Court of Australia has held that the Commissioner of Taxation’s (Commissioner) formal information gathering powers override the obligation imposed on a party to litigation not to use information or documents disclosed by another party for any other purpose outside the proceedings in which they were disclosed (commonly known as the ‘Harman obligation’1).

The Ag industry continues to face financial challenges. The potential of a bankruptcy notice remains ever present. Ignore a bankruptcy notice at your own peril.

Pay close attention to any mail involving a bankruptcy case – because every bankruptcy case in which the Debtor owes you or your institution money, or has property you or your institution may have an interest in, has the potential to affect your interests. Consider the following hypotheticals:

JWS has achieved an excellent result for the liquidators of the Gunns Group, with success in the Federal Court’s judgment in Bryant (Liquidator) v L.V. Dohnt & Co Pty Ltd, In the Matter of Gunns Limited (In Liq.) (Receivers and Managers Appointed) [2018] FCA 238.

JWS has achieved a significant win on behalf of Linc’s liquidators, PPB Advisory, in their proceedings against the Queensland State Government in relation to Linc’s environmental liabilities. The Queensland Court of Appeal has unanimously overturned the Supreme Court judgment of Jackson J, which was the subject of an appeal hearing in September 2017 at which Bret Walker SC appeared for the liquidators.  

Justice Robson’s decision in Re Amerind1 was one of a number of recent authorities which created doubt as to how the statutory insolvency regime, and in particular how the priority waterfall, should be applied to recoveries from trust assets.

By most measures the economy is strong. Unemployment is low. The stock market is roaring. Gross domestic product is rising. Under these circumstances, bankruptcy is on few people’s minds.

Corporate bankruptcy tends to be cyclical, and bankruptcy filings trend up and down along with the direction of the macro economy. The last big surge in corporate bankruptcy filings came in the wake of last decade’s financial crisis (and closer to home here in Michigan, the automotive crisis) and “Great Recession.”

JWS successfully protected the rights of the class action creditors to have their claims in the voluntary administration of SurfStitch Group Limited (SGL) valued appropriately, for the purposes of voting at the second meeting of creditors of SGL. Joseph Scarcella of JWS acts for Nakali Pty Limited (Nakali), the lead plaintiff in the first class action proceeding instituted against SGL.