By its much anticipated yet hardly surprising judgment in Forge Group Power Pty Limited (in liquidation)(receivers and managers appointed) v General Electric International Inc  [2016] NSWSC 52, the Supreme Court of New South Wales has again shone a bright light on the importance of perfection of security interests under the PPSA, and the dramatic consequences that follow for failing to do so by reason of the PPSA vesting rules.  Indeed, the failure to register in this case has had multi-million dollar consequences.

For a distressed company running low on capital, an investment from insiders may represent a last best hope for survival. Insiders may be willing to risk throwing good money after bad for a chance to save the company even when any third party would stay safely away. Insiders  of a failing company may also have an ulterior motive for making an eleventh hour capital infusion, as they may use their control over a distressed company to enhance their position relative to the company’s other creditors. The line between a good faith rescue and bad faith self-dealing is often a hazy one.

The decision in Adhesive Pro Pty Ltd v Blackrock Supplies Pty Ltd [2015] ACTSC 288 reinforces the strict rule that an application to set aside a statutory demand must be filed and served within 21 days of receiving the demand.

Statutory demands are a common and useful tool for many unsecured creditors seeking payment of a debt.  Non-compliance with a statutory demand results in a presumption of insolvency and the possibility that a creditor can apply to wind up a company debtor.

What better time than the holiday season to discuss “gifting” in the context of chapter 11 cases.  “Gifting” commonly refers to the situation where a senior creditor pays (or allocates a portion of its collateral for the benefit of) one or more junior claimholders.  Gifting is often employed as a tool to resolve the opposition of a junior class of creditors, who are typically out-of-the-money, to the manner in which the bankruptcy case is being administered.  For instance, creditors’ committees may seek gifts from senior creditors to guarantee a recovery for general unsecured

The Insolvency Law Reform Bill 2015 has been introduced into Parliament as part of the Australian Government's strategy to modernise and strengthen the nation's insolvency and corporate reorganisation framework.

A decision last month by the U.S. Bankruptcy Court for the District of New Hampshire serves as a good reminder that, although helpful, Bankruptcy Code Section 365(n)’s protection for intellectual property licenseesdefinitely has its limits.

The Court of Appeals for the Seventh Circuit recently issued a decision which may give a trump card to fraudulent transfer defendants seeking to use the “good faith” defense under the Bankruptcy Code’s recovery provision. This defense, set forth in section 550(b)(1), provides that a trustee may not recover a voidable transfer from “a transferee that takes for value, including satisfaction or securing of a present or antecedent debt, in good faith, and without knowledge of the voidablity of the transfer avoided[.]” (emphasis added).

Almost every year, changes are made to the set of rules that govern how bankruptcy cases are managed — the Federal Rules of Bankruptcy Procedure. The changes address issues identified by an Advisory Committee made up of federal judges, bankruptcy attorneys, and others. Often there are revisions to the official bankruptcy forms as well.

Freezing orders and the Foreign Judgments Act

Freezing orders (also known as Mareva orders or Mareva injunctions) are oft-used tools available to a plaintiff to preserve the assets of a defendant, where there is a danger of the defendant absconding or of the assets being removed from the jurisdiction or otherwise diminished. Such dangers put in peril the ability of a plaintiff to recover any favourable judgment against that defendant.

Introduction

The Full Court of the Federal Court has given some important guidance on the calculation of remuneration for court appointed receivers.  In its decision in Templeton v Australian Securities and Investment Commission the Court has highlighted the importance of proportionality in determining reasonable remuneration.

General Position