In a Court of Appeal decision handed down last week the court considered the interplay between the construction adjudication process on the one hand and the insolvency regime on the other.
The Personal Property Securities Register (PPSR) commenced operation on 30 January 2012. All seven-year registrations made on the:
- old state-based motor vehicle registers, immediately before the PPSR commenced; or
- PPSR immediately after it commenced,
will begin to expire shortly and this will have adverse consequences for secured parties who do not act to renew.
The latest decision in the external administration ofMirabela is a reminder of the utility of the section 424 directions process for receivers, and an example of the steps to be taken in the face of competing asset claims.
The Court directed that the receivers of Mirabela were justified in distributing sale proceeds of approximately US$59.5 million in the face of a third party claim to the proceeds, provided the receivers first gave 21 days’ notice of intent to do so.
The case is a timely reminder that:
The Federal Court has confirmed that there is no difference between liquidation and deed administration of a corporate trustee in relation to dealings with trust assets and the distribution of proceeds of those assets for the benefit of creditors.
Background
Manpak operated as the trustee for the MP Unit Trust, which carried on the business of a product wholesaler. Under the Trust Deed, Manpak would be disqualified from holding office if it suffered an Event of Default, which included the appointment of an administrator.
The Court of Appeal - Supreme Court of Western Australian has delivered a decision confirming that a statutory set-off under s 553C of the Corporations Act can still be available to a creditor where a general security interest has attached to the amounts it is seeking to set-off (provided those amounts are circulating assets of the insolvent company), whilst leaving the door open for creditors to rely upon set-off rights at general law in those instances where set-off under s 553C is unavailable.
The long awaited new Scottish Insolvency Rules for Company Voluntary Arrangements and Administration (The Insolvency (Scotland) (Company Voluntary Arrangements and Administration) Rules 2018) were laid in Parliament today. The Rules are a negative SI which means they do not need active approval by Parliament and will automatically come into effect as law unless either the Commons or Lords annuls them within a fixed period after they have been laid. The intention is that they will commence on 6 April 2019.
It’s been reported that the board of directors of AIM-listed Patisserie Holdings plc, which owns the Patisserie Valerie chain of cafés, was not aware for almost a month that HMRC had filed a petition at the High Court of England and Wales to wind up its main trading subsidiary, Stonebeach Limited.
Recently, there have been a number of high profile insolvencies hitting the headlines with a number of High Street retailers entering insolvency either by proposing a company voluntary administration (“CVA”) or via another formal insolvency process. With the recent number of high profile insolvencies there has been scrutiny of directors’ duties not only by media but also at government level.
The High Court recently handed down its much anticipated judgment in Mighty River International Limited v Hughes, confirming that deeds of company arrangement which have the effect of extending the administration period can be valid under the Corporations Act 2001 (Cth) (the Act).
Key takeaways
The High Court has refused to grant the Queensland State Government (Qld Government) special leave to appeal the Queensland Court of Appeal’s March 2018 decision in favour of the liquidators of Linc Energy, concerning the liquidators’ obligations to cause Linc Energy to comply with an Environmental Protection Order (EPO).