The Regulator has updated its guidance on assessing and monitoring the employer covenant in order to help trustees apply the defined benefit funding code of practice (“the Code”).
The guidance is intended to identify good practice for trustees in:
It is not uncommon for companies served with wind up proceedings to appoint external administrators for the purposes of investigating the affairs of the company and so that recommendations can be made to creditors to either have the company wound up, execute a deed of company arrangement or hand the company back into the control of directors.
In circumstances where the administrators conclude that the company should be wound up, it is common for the administrators to seek to be appointed as the official liquidators of the company.
In so far as they relates to creditor's statutory demands, the provisions of the Corporations Act 2001 (Cth) are construed by the courts particularly prescriptively.
On 5 June 2015, His Honour Justice Brereton delivered judgment in In the matter of Unity Resources Group Australia Pty Limited [2015] NSWSC 1174. This is another example of the technical application of these sections by the court.
This article provides an essential update for insolvency practitioners on insolvency changes in 2015 and the proposed changes in 2016.
2015 Changes
The Small Business, Enterprise and Employment Act 2015
In recent times, the legal profession has undergone widespread changes at the bequest of previous governments. The most draconian measures have been in relation to the expense of professional services. These include a budgeting and costs management process which is the subject of judicial approval. In essence, service provider’s fees and expenses are estimated and capped in advance of them being incurred.
The Fair Entitlements Guarantee Act 2012 (Cth) requires the Commonwealth Government to pay outstanding superannuation, annual leave, redundancy and wages entitlements for eligible employees who have lost their jobs due to the liquidation or bankruptcy of their employers. It is generally recognised as an important safety net for employees, so that their superannuation is guaranteed.
The Bankruptcy Act 1966 (Cth) (the Act) provides a regime by which a debtor can compromise with his/her creditors outside formal bankruptcy. The provisions are found in Part X (Personal Insolvency Agreements) and Part IX (Debt Agreements) of the Act.
DEBT AGREEMENTS
The Pension Protection Fund (PPF) has issued a guidance note on Insolvency Practitioner remuneration which will apply where the insolvent company has a Defined Benefit Pension Scheme. The guidance note applies to pre and post appointment work.
The Guidance Note can be found here.
The Supreme Court has handed down its judgment in the case of The Trustees of Olympic Airlines SA Pension and Life Assurance Scheme –v- Olympic Airlines SA. Pitmans’ Trustee company, PTL, were the Appellants.
The question at issue was what connection must a foreign company, that has its Centre of Main Interests (COMI) in another EU country, have within the United Kingdom, to entitle an English Court to wind it up.
The High Court has recently clarified what is required for the creation of an express trust (Korda & Ors v Australian Executor Trustees (SA) Ltd [2015] HCA 6 (Korda)).
To be effective, express trusts must satisfy the three certainties of intention, subject matter and object. That is: