Can you prefer one creditor by arranging a third party loan, the proceeds of which are paid directly to that creditor, without the arrangement being void against your trustee in bankruptcy? “Yes” says the Full Federal Court – thus confirming an important distinction between personal and corporate insolvency.
Rambaldi (Trustee) v Commissioner of Taxation, in the matter of Alex (Bankrupt) [2017] FCAFC 217
In Bespark Technologies Engineering Ltd v JV Fitness Ltd the High Court recently took the opportunity to remind liquidators of their duty to give full and frank disclosure when making an ex parte (without notice) application to the court.(1) A failure to do so could have serious consequences, including a refusal to approve the appointment of a liquidator or an order for his or her removal. The duty to be full and frank applies to all ex parte applications, so there are general lessons to be learned.
ADVISORY | DISPUTES | TRANSACTIONS Restructuring and insolvency roundup January 2018 In this roundup, we consider four cases with implications for all those involved in the restructuring and insolvency sector. This edition includes an article on crowdfunding, a sector which continues to be of interest to practitioners giving the changing regulatory landscape and the risk to investors. Other cases include two Court of Appeal decisions and cover privilege in bankruptcy, the adequacy of ATE policies, and the requirement for boards to be quorate when directors appoint administrators.
Hughes v Pluton Resources Ltd [2017] WASCA 213
This case concerned the application of the Personal Property Securities Act 2009 (Cth) (the PPSA) to funds held by a company in liquidation following the termination of a DOCA. In the course of its decision, the Court considered the meaning of various provisions of the PPSA, including:
A recent application made by the insolvency practitioner of Agrokor, a major Croatian conglomerate, resulted in recognition in England of a stay of civil proceedings against the group. The purpose of the application was to halt any proceedings in relation to Agrokor's securities and debt obligations containing English law and jurisdiction provisions, pending the restructuring in the Croatian insolvency proceedings of the group's affairs.
In UBS AG v Kommunale Wasserwerke Leipzig GmbH(1) the Court of Appeal heard an appeal relating to whether complex, loss-making financial transactions were enforceable against the respondent (KWL) in circumstances where they had been entered into against the backdrop of a corrupt relationship between the appellant counterparty (UBS) and the respondent's agent (Value Partners).
Introduction
Does a potential administrator’s involvement in pre-administration contingency planning give rise to a conflict of interest, such that the potential administrator should be disqualified from accepting the formal appointment?
Korda, in the matter of Ten Network Holdings Ltd (Administrators Appointed) (Receivers and Managers Appointed) [2017] FCA 914