This week, the Federal Court published judgments in three unfair preference claims brought by the liquidators of the Gunns Group. We acted for the liquidators in each proceeding.

Times are changing rapidly with the current flow of Coronavirus measures introduced to support businesses in debt and distress.

We take a look at what creditors can (and can’t) do to help better protect their position.

I’m owed money. What can I do?

Certain recent government measures may impede your ability to take recovery or enforcement action at the present time. The good news is that many avenues remain available.

You cannot (in some cases):

In this week’s update: the High Court orders scheme creditor meetings to be held by phone, IA guidance on executive pay and a few other items.

Covid-19 is affecting the way people conduct their business, retain their staff, engage with clients, comply with regulations and the list goes on. Read our thoughts on these issues and many others on our dedicated Covid-19 page.

Court allows scheme meetings to be held electronically

The UK government has announced amendments to certain aspects of insolvency law, designed to enable businesses which have been adversely affected by the coronavirus outbreak to continue trading while they explore options for rescue or to restructure.

In this week’s update: Guidance on virtual board and committee meetings, updates and guidance on AGMs, pre-emption principles are relaxed and a few other items.

This week, in coronavirus-related news

The Coronavirus Act 2020 is now in force and Section 82 of that Act effecting the postponement of the landlord’s right to forfeit for non-payment of rent is causing consternation amongst both landlords and tenants as they seek to navigate through these uncertain times.

In a recent decision in the Supreme Court of NSW[1], Rees J set aside a liquidator’s bid to publicly examine two senior officers of the National Rugby League (NRL), finding that examination summonses issued by the liquidator were an abuse of process and the entire liquidation process was a contrivance in order to exert commercial pressure on the NRL.

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 last week's Government budget, the Chancellor of the Exchequer confirmed that Crown preference would return but that this would be delayed to 1 December 2020. We previously wrote about Crown preference in November 2018 when the Government first suggested its return. That post, which is available here, is a handy summary of what Crown preference is and its impact on secured creditors.

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: