On 24 December 2020, the Federal Court of Australia published reasons for a decision in which I appeared for the liquidators of two related companies, Bestjet Travel Pty Ltd (in liq) and Wynyard Travel Pty Ltd (in liq). The decision can be accessed here.
Key points
- Directors have been temporarily relieved of their duty to prevent insolvent trading during the COVID-19 pandemic.
- That relief is scheduled to expire on 31 December 2020.
- Many commentators believe that directors can only avail themselves of the temporary relief if they appoint a liquidator or administrator before the moratorium expires.
- Directors of companies at risk of insolvency should seek legal advice regarding their potential liability.
The Government’s response to the pandemic
Australia’s ageing population has driven innovation in delivering housing solutions for retirees and elderly alike. As a nation of sports fanatics who also love nature and green open spaces, it is no surprise that there has been a steadily increasing trend to co-locate retirement living with recreational facilities such as golf courses, bowls clubs and other recreational clubs.
HopgoodGanim has been fortunate enough to have acted for a number of retirement village operators (scheme operators) and clubs with respect to co-location projects in Queensland.
The Treasurer has announced major proposed reforms to Australia’s insolvency framework aimed at facilitating the restructuring of small to medium businesses (MSMEs) and streamlining their liquidation if rescue is not achievable (Reforms). The Reforms are intended to come into effect from 1 January 2021, after the suite of current insolvency protections introduced to address the economic impact of COVID-19, expire on 31 December 2020.
The Australian Government has announced that the operation of temporary COVID-19 relief measures for businesses in the hope of aiding distressed companies and preventing further economic breakdown will be extended until 31 December 2020.[1]
In its recent judgment involving the PAS Group of companies[1], the Federal Court held that rent payable by the PAS Group during an extension of the period in which an administrator had been excused from personal liability (Standstill Period) is an expense properly incurred by a ‘relevant authority in carrying on the company’s business’ and is therefore a priority debt under s 556(1)(a) of the Corporations
Corporate ventures are usually founded with the very best intentions, but as matters unfold disputes between investors are all too common.
The legal steps to resolve such disputes and assert control over a company can be complex and arduous.
However, there are good reasons for this due process, and it cannot be circumvented.
The Supreme Court of New South Wales has helpfully given guidance to the liquidators of the RCR Tomlinson Group on a number of unsettled questions that have challenged insolvency practitioners (particularly liquidators of construction companies) when assessing whether certain intangible rights and assets are circulating assets.
The questions include:
This week, the Federal Court published judgments in three unfair preference claims brought by the liquidators of the Gunns Group. We acted for the liquidators in each proceeding.
Times are changing rapidly with the current flow of Coronavirus measures introduced to support businesses in debt and distress.
We take a look at what creditors can (and can’t) do to help better protect their position.
I’m owed money. What can I do?
Certain recent government measures may impede your ability to take recovery or enforcement action at the present time. The good news is that many avenues remain available.
You cannot (in some cases):