The Second Circuit released a new decision this week in Sears regarding bankruptcy valuation methodologies and the entitlement of second lien debt holders to adequate protection. Among other interesting aspects of the ruling, the Second Circuit affirmed the Bankruptcy Court’s adoption of a "net orderly liquidation value" for the debtors’ inventory as of the petition date (rather than looking to the actual values obtained by the debtors during the case).
For a decade or more, restructuring professionals have predicted the coming of a bankruptcy boom. This may be the year those predictions finally come true. Inflation, interest rates, supply chain issues, global conflict and domestic politics have created a challenging macro environment. At the same time, dry powder abounds, with new distressed debt funds cropping up daily. Will this result in a bankruptcy tidal wave, or an increase in workouts and distressed M&A? Perhaps all of the above.
In significant news for the insolvency industry, the High Court will hear the long-awaited Gunns Group preference claim appeal in Bryant & Ors v Badenoch Integrated Logging (A10/2022) on 18 October 2022.
Johnson Winter & Slattery act for PwC, the appellant liquidators of the Gunns group, in the proceeding.
Briefly stated, the grounds for the appeal are:
In its recent judgment in Re Jabiru[1], the Supreme Court of New South Wales applied principles governing the appointment of Special Purpose Liquidators (SPL) in rejecting the Plaintiffs’ application for a SPL to be appointed to pursue claims against secured lenders.
In a recent Supreme Court of Victoria decision[1] in which we acted for the successful liquidators, the Court made various orders to enable the company to complete an ultra-efficient, streamlined second voluntary administration to expedite creditor consideration of a new DOCA proposal.
Key points
The recent Federal Court decision in Diversa Pty Ltd v Taiping Trustees Limited has highlighted some important risks faced by secured parties who don’t pay attention to the details when perfecting, and maintaining perfection of, their security.
The recent Federal Court decision in Diversa Pty Ltd v Taiping Trustees Limited has highlighted some important risks faced by secured parties who don’t pay attention to the details when perfecting, and maintaining perfection of, their security. Those risks include:
Morton as Liquidator of MJ Woodman Electrical Contractors Pty Ltd v Metal Manufacturers Pty Limited [2021] FCAFC 228.
In a resounding judgment delivered last week, the Full Federal Court has confirmed that a statutory set-off under section 533C is not available to a defendant in unfair preference proceedings.
Key Takeaways
The Australian Sawmilling Co Pty Ltd (in liq) v Environment Protection Authority [2021] VSCA 294
The Victorian Court of Appeal’s decision in The Australian Sawmilling Co Pty Ltd (in liq) v Environment Protection Authority [2021] VSCA 294 casts significant doubt on liquidators’ capacity to rely upon section 568 of the Corporations Act to disclaim environmental liabilities, despite the absence of any involvement of the liquidator in the creation of those liabilities.
In a substantial recent decision arising from the Arrium liquidation[1], the Supreme Court of New South Wales considered the materiality of significant future liabilities in assessing the company’s solvency.
A hotly anticipated decision in the ongoing saga of the Babcock & Brown liquidation was handed down last week, resulting in another win for the liquidator (represented by Johnson Winter & Slattery) and further highlighting the challenges facing liquidators when they are thrust into a quasi-judicial function when assessing proofs of debt.