Keeping on top of the latest financial services regulatory and compliance trends?
Investing time in your professional development within a rapidly changing financial services industry is challenging. To meet that challenge, the Australian Regulators Weekly Wrapis designed to keep you at the forefront of your practice by quickly setting out the top five developments from the past week, analysis and practical considerations for the future.
The long, long awaited Supreme Court Judgment in the Sequana case is finally here. Firstly, for those who may have forgotten what the Supreme Court was grappling with, the issue was 'whether the trigger for the directors’ duty to consider creditors is merely a real risk of, as opposed to a probability of or close proximity to, insolvency'.
In Kellow, Re Advanced Building & Construction Ltd (In Liq) v Advanced Building & Construction Ltd (In Liq) (No 2) (Kellow) the Court considered whether an insolvency proceeding commenced in New Zealand should be recognised as a “foreign main proceeding” pursuant to the United Nations’ Commission on International Trade Law’s Model Law on International Trade Law (Model Law).
In a recent case involving a former financial services provider in liquidation, thousands of pending claims from former customers and a letter of comfort with a looming expiry date, the Liquidators appointed to wind up Forex Capital Trading Pty Limited successfully applied to the Federal Court of Australia for orders permitting them to conduct an expedited process for the adjudication and admission of claims.
Background
The Insolvency Service has reported the first disqualifications under new legislation introduced to tackle the practice of directors dissolving companies in order to evade debts.
In Brooks, in the matter of Tease Hair & Spa Pty Ltd (in liquidation), the Federal Court made orders in favour of the Liquidator, pursuant to section 90-15 of Schedule 2 to the Corporations Act 2001 (Cth) (Insolvency Practice Schedule (Corporations)) and section 47 of the Trustee Act 1989 (Tas) allowing the Liquidator to realise trust property for the benefit of creditors.
Background
This matter involved the former director and former accountant of CGS Constructions (QLD) Pty Ltd filing proceedings seeking an injunction to restrain the Liquidators from engaging Cornwalls Lawyers to act on the basis that:
- Cornwalls also acted for a substantial creditor, Union Share Pty Ltd; and
- the Liquidators, by engaging Cornwalls, had manifested a tendency to favour certain interests at the expense of others.
Background
In the matter of Squirrel Limited (In Liquidation), the Court considered an application for summary judgement against a director for insolvent trading. In doing so, the Court considered the principles underpinning a director’s duty to prevent insolvent trading and the compensation payable as a result.
Background
In Re Intellicomms Pty Ltd (in liq) [2022] VSC 228, it was determined that a sale agreement was a creditor-defeating disposition within the meaning of section 588FDB of the Corporations Act 2001 (Cth) (Act) and voidable pursuant to section 588FE(6B) of the Act.
The Supreme Court of Victoria has considered the viability of allowing a company to enter a second voluntary administration after going into liquidation following a failed DOCA. The Court considered that rather than maintain a state of liquidation, the secondary voluntary administration process would better serve the best interests of creditors and optimise the efficiency of the restructuring process. The decision serves as a useful guide to the considerations and orders appropriate for successfully arguing a company out of liquidation.
Background