The Coronavirus Economic Response Package Omnibus Bill 2020 (Coronavirus Response Bill) was passed on 23 March 2020 and received Royal Assent on 24 March 2020 following the Federal Government’s announcements made between 12 and 22 March 2020 of its economic response to the spread of the coronavirus pandemic.

The Coronavirus Response Bill provides, amongst other legislative amendments, for temporary changes of 6 months’ duration to Australian insolvency and corporations laws to assist in managing the sudden economic shock resulting from COVID-19.

In its recent decision in the ongoing Solar Shop litigation,[1] the Full Federal Court established two key principles which will have significant ongoing implications for the conduct of unfair preference claims:

In Carrello,^[1] the Federal Court granted a warrant under section 530C of the Corporations Act 2001 (Cth) (the Act) allowing the liquidator of Drilling Australia Pty Ltd (the Company) to search and seize property, books and records located in storage containers belonging to the Company.

The Federal Court has considered whether a deed of company arrangement (DoCA) binds a regulator. The case involved an application by the Fair Work Ombudsman (FWO) for leave to proceed against a company in liquidation. The Court rejected the company’s argument that the FWO’s claims were extinguished by the DoCA and granted the FWO leave to pursue the claim. The outcome of the proceedings may impact the types of, and circumstances in which, claims by a regulator will not be extinguished by a DoCA.

In a decision of the Federal Court handed down on 18 October 2019 in Masters v Lombe (Liquidator); In the Matter of Babcock & Brown Limited (In Liquidation) [2019] FCA 1720, Foster J held that Babcock & Brown Limited (BBL) did not breach the continuous disclosure obligations in the Corporations Act 2001 and the ASX Listing Rules.

How should the liquidator of an insolvent trustee company ensure payment out of trust assets of the entirety of his or her remuneration and expenses?

In complex long-term charters for vessels or finance leases in respect of vessels under the U.S. Uniform Commercial Code (“UCC”) and its Article 2A (governing commercial matters relating to finance leases) and under other similar law, a charterer’s or lessor’s damages under a charter or lease— both generally upon a payment default or in the event of a casualty—are often liquidated in stipulated loss value (“SLV”) provisions. These provisions ensure that the lessor/charterer gets the benefit of its bargain.

The Insolvency Working Group of the United Nations Commission on International Trade Law (“UNCITRAL”⁾¹ has been busy this past year, working on three new model laws and developing work on at least two possible future projects.2 The Insolvency Working Group is responsible for drafting the Model Law on Cross-Border Insolvency (the “CBI Model Law”) in 1997, which has since been adopted in 46 countries and is under consideration in several others. In 2005, the United States adopted the CBI Model Law as Chapter 15 of the United States Bankruptcy Code. 

In its much anticipated decision, the High Court has unanimously dismissed the Amerind appeal.[1] This decision finally resolves recent uncertainty as to the proper application of trust assets in the liquidation of an insolvent corporate trustee.

In short, the High Court’s decision confirms that in the winding up of a corporate trustee:

The Supreme Court recently limited the ability of debtors to use contract rejection in bankruptcy to shed unwanted trademark licensees. But the Court acknowledged that the result could change if the trademark licensing agreement had different termination rights. Going forward, parties entering into trademark licensing agreements will need to consider this decision carefully as they negotiate termination rights in the event of a bankruptcy by the licensor.