JWS successfully protected the rights of the class action creditors to have their claims in the voluntary administration of SurfStitch Group Limited (SGL) valued appropriately, for the purposes of voting at the second meeting of creditors of SGL. Joseph Scarcella of JWS acts for Nakali Pty Limited (Nakali), the lead plaintiff in the first class action proceeding instituted against SGL.
On 22 January 2018, Statistics South Africa released a report for the period January to December 2017 on insolvencies in South Africa. This report reveals a general decrease in liquidations.
What is the “fatal flaw” in our law? The Insolvency Act, 1936 (Insolvency Act) has always made provision for the holder of a pledge and cession in security over “marketable securities” (Secured Party), upon the insolvency of the security provider (Security Provider), to immediately realise those marketable securities through or to a stockbroker on a recognised stock exchange. However, in terms of s83(10) of the Insolvency Act (as it currently stands), once the pledged securities have been so realised they must be paid over to the liquidator.
In Re Atwell & Co Pty Ltd (in liq) [2017] VSC 683, Justice Kennedy of the Supreme Court of Victoria considered the application of the ‘proportionality’ principle in determining liquidator remuneration.
Certain debtors have become masters of delay and indeed professional insolvents, leaving creditors and failed businesses in their wake.
The legal moratorium is a protective mechanism inherent in business rescue proceedings. Another safety net available to debtors is the possibility of rehabilitation of insolvent estates. Debtors use these and other methods to take advantage of the system and their creditors, delaying the winding up process and impeding creditors’ recovery.
Making sense of the purchase money security interest (PMSI) priority provisions in the Personal Property Securities Act 2009 (Cth) (PPSA) can be challenging for financiers and insolvency practitioners tasked with assessing the merits of competing security interest claims.
The recent judgment of the Western Australian Court of Appeal in Hughes v Pluton Resources Ltd 1, concerns the interaction between a deed of company arrangement (‘DOCA’) under Part 5.3A of the Corporations Act 2001 (Cth) (‘CA’) and the Personal Property Securities Act 2009 (Cth) (‘PPSA’).
The new section 588GA of the Corporations Act 2001 (Cth) (Act) provides a “safe harbour” from insolvent trading claims for directors who, when suspecting a company may be or is insolvent, start developing a course of action that is reasonably likely to lead to a better outcome for the company.
In Ex Parte Nell and Others NO 2014 (6) SA 545 (GP) (28 July 2014), the board of a company passed a resolution placing it in business rescue in accordance with s129 of the Companies Act, No 71 of 2008 (Companies Act). In terms of this section, a financially distressed company may, without any prior judicial oversight or consultation with its creditors, achieve a general moratorium against legal proceedings.
In the recent Federal Course case of Lane (Trustee), in the matter of Lee (Bankrupt) v Deputy Commissioner of Taxation [2017] FCA 953 (Lane v DCT), Justice Derrington provided an in-depth analysis of the principles relating to an insolvent trustee’s right of indemnity over trust assets.