Section 477(2B) of the Corporations Act 2001 (Cth) provides that a liquidator must not enter into any sort of agreement that may last longer than three months without first obtaining approval of the Court, of the committee of inspection or by a resolution of the creditors.
Typically, a litigation funding agreement will be caught by this section because it will last more than three months.
The reference to ‘enter into an agreement’ could also catch a novation, and potentially a variation, to an agreement.
Op 22 juni 2017 heeft het Hof van Justitie van de Europese Unie antwoord gegeven op een vraag die de gemoederen lang bezig heeft gehouden, namelijk: gelden de regels van overgang van onderneming ook in geval van een doorstart na een pre-pack faillissement?
All Australian states have sale of goods legislation that, in certain circumstances, allows an unpaid seller to retain possession of goods in transit where the buyer becomes insolvent. The statutory right, called stoppage intransitu, is a useful remedy to obtain payment.
A registered security interest on the PPSR is not required to exercise the statutory right. Administrators and liquidators may be trumped by a notice under the stoppage in transitu provisions.
However, the sale of goods legislation is not identical in each state.
Competing claims to goods are common where there is an unpaid seller with alleged retention of title, the supplier’s customer has gone into external administration and the goods are in the possession of a transport or warehouse provider. Thrown into the mix may be an administrator or liquidator demanding possession of the goods to sell them.
The recent case of M Webster Holdings Pty Limited (administrators appointed) v Specific Freight Pty Limited [2017] FCA 269 illustrates how a transport provider can become ‘the meat in the sandwich’ when a consignee of goods becomes insolvent.
Webster, a fashion retailer, operated two well-known Australian businesses, David Lawrence and Marcs. Webster was placed into administration in February 2017 and its administrators continued to trade with a view to securing a purchaser.
The statutory demand process is widely used by companies wishing to secure prompt payment of debts owing by companies registered in Australia. This article will look at a company's options for dealing with a statutory demand.
What is a statutory demand?
Introduction
The Sapin II Act of November 8 2016 amended the regime governing directors' liability in an insolvency scenario in order to encourage the recovery of honest directors of failed businesses.
The Sapin II Act of November 8 2016 amended the regime governing directors' liability in an insolvency scenario in order to encourage the recovery of honest directors of failed businesses.
On 23 March 2017, Justice Robson of the Supreme Court of Victoria declined to follow the Victorian Court of Appeal decision of Re Enhill, finding that the decision was not binding with respect to different legislation (the Companies Act 1961 (Vic) as opposed to theCorporations Act 2001 (Cth)).
Background
Since the early 1980s, there has been a divergence of judicial opinion in the decisions of Re EnhillPty Ltd [1983] 1 VR 561 and Re Suco Gold Pty Ltd (in liq) (1983) 33 SASR 99.
On 17 March, in Hambleton v Finn [2017] QDC 61, McGill SC DCJ of the District Court of Queensland applied the section 553C(1) setoff under the Corporations Act 2001 to a liquidator’s insolvent trading claim against a director.
His Honour followed the earlier decision of the District Court of Queensland in Morton v Rexel Electrical Supplies Pty Ltd. In that case, the set-off provision was applied where the liquidator was seeking the recovery of unfair preference payments.