Where it appears that there has been concealment or removal of valuable assets and little to no co-operation from the directors in the course of a liquidation, the section 530C warrant procedure in the Corporations Act 2001 (Cth) has proven to be an effective means of obtaining information regarding company books and assets.
It is important for a receiver or voluntary administrator to ensure that a proper sales process is undertaken relevant to the circumstances as there is no "one-size-fits-all" approach.
Victoria's Court of Appeal has reaffirmed the risk that a disclaimer of property may be set aside where the liquidators are indemnified, and the need for liquidators to be mindful where the company holds contaminated property.
The case of John Doyle Construction Ltd v Erith Contractors Ltd [2021] EWCA Civ 1452 (07 October 2021) saw the Court of Appeal re-explore the conflict between the adjudication process and insolvency following the Supreme Court decision ofBresco Electrical Services Ltd v Michael J Lonsdale Ltd.
According to press reports, utilities contractor NMCN (formerly North Midland Construction) plc and its subsidiary NMCN Sustainable Solutions Limited, have gone into administration.
Administration is the procedure by which a company that is, or is likely to become, insolvent can be reorganised or have its assets realised for the benefit of creditors. The primary aim of an administration is to rescue the company so that it can continue to trade as a going concern. If this is not possible, a company may go into administration for two other purposes:
It is important for a receiver or voluntary administrator to ensure that a proper sales process is undertaken relevant to the circumstances as there is no "one-size-fits-all" approach.
The abolition of the "peak indebtedness" rule will complicate liquidators' tasks, not least its adverse effect on pursuing preferences where it's unclear what forms the single transaction.
Our research shows rescue financing in Australia has been deployed as one element of a broader restructuring strategy, most commonly by an existing stakeholder, rather than as a profitable activity in itself.
As participants in the Australian debt restructuring market continue to innovate we expect to see an increase in these control transactions, testing further again the Australian statutory regimes.
The Virgin sale shows the flexibility of Australia's restructuring regime and sets a significant judicial precedent for future control transactions.
Virgin Airlines restructured through voluntary administration
On 20 April 2020, Virgin Australia and a number of its subsidiaries were placed into voluntary administration owing $7 billion of debt to around 12,000 creditors with partners at Deloitte Australia being appointed as joint and several voluntary administrators of Virgin. Clayton Utz was appointed to act for the Administrators.