On April 16, Mt. Gox’s civil rehabilitation proceeding in Tokyo (something similar to a U.S. Chapter 11) was dismissed and the initial stages of a bankruptcy liquidation under Japanese law began. An Interim Administrator (Nobuaki Kobaysahi) has been named until the Japanese court decides whether the liquidation will begin and whether a different Administrator replaces the Interim Administrator. How this situation came to be is an interesting tale.

Mt. Gox filed a motion requesting the U.S. Bankruptcy Court’s approval of the form of the official notification of the May 6 recognition hearing as well as approving the service via email.  The motion also seeks to establish a deadline of seven days before that hearing for any party to object to the request for recognition of the Japanese insolvency case.  Additional notice would be provided by posting an approved form of notification on the Mt. Gox web site as well as at the Reddit.com site.

Tuesday evening, the Plaintiffs in the Illinois Class Action litigation filed motions with the U.S. Bankruptcy Court in Dallas asking that court to terminate the temporary stay it recently granted to Mt. Gox. They also asked that Robert Marie Mark Karpeles (the Foreign Representative for Mt. Gox) be ordered to provide testimony under oath in the United States regarding the Chapter 15 filing.

Introduction

Introduction

Does the ATO have priority over secured creditors in a liquidation? Is a receiver required to account to the ATO for any tax payable out of funds received on the sale of an asset before accounting to the secured creditor? Are receivers and liquidators personally liable for the tax payable from funds received by them? Can receivers and liquidators avoid such personal liability by distributing funds received to creditors before a tax assessment arises? These issues were at the centre of a Federal Court judgment handed down on 21 February 2014.

Two days before Christmas, the Supreme Court of New South Wales delivered a bonus for the general unsecured creditors of the collapsed discount giant Retail Adventures, and confirmed the requirements for deeds of company arrangement.

Deeds of Company Arrangement

Today the High Court of Australia handed down a decision which confirms a liquidator has the green light to disclaim leasehold interests in land (Willmott Growers Group Inc v Willmott Forests Limited (receivers and managers appointed)(in liquidation)).

Due to the way in which the case came before the Courts, the High Court did not consider the application of s568B of the Corporations Act 2001 (Cth) (Act). 

This section allows tenants to challenge in Court the liquidator’s disclaimer.

ASIC suspended the Australian Financial Services Licence of LM Investment Management Limited for two years this week for being an externally managed vehicle (voluntary administrators were appointed in March 2013). The practical effect of the suspension will mean that LM Investment Management won’t continue managing its nine funds. ASIC is also investigating the complex structure of the business and their related party transactions with the principal, Peter Drake.