Every five years or so, the insolvency profession seems to try and wrestle with the public outcry about the use of so-called pre-packs. In its simplest terms, this is where “Widget Manufacturing Limited” goes into administration, and the very next day “Widget Manufacturing 2021 Limited” is operating the same business and being owned by the same shareholders. The only crucial difference is that several key liabilities (usually owed to landlords) are left behind in the insolvent business.
This week’s TGIF considers an application to the Federal Court for the private hearing of a public examination where separate criminal proceedings were also on foot.
Key takeaways
This week’s TGIF looks at a recent decision of the Victorian Supreme Court, where a winding up application was adjourned to allow the debtor company to pursue restructuring under the recently introduced small business restructuring reforms.
Key takeaways
Unlike the GFC, which was essentially a liquidity crisis, Australia is likely to face a gradual increase in business insolvencies, rather than the feared ‘insolvency cliff’, as the Federal Government’s COVID-19 stimulus measures are wound down at the end of March.
This week’s TGIF focuses on themes that are emerging as Australia moves to an economic recovery phase and sees the end of government intervention to prevent insolvencies.
Key takeaways
This week’s TGIF considers the decision of the Supreme Court of New South Wales In the matter of Gearhouse BSI Pty Ltd [2021] NSWSC 98. In this case, one of the joint venture parties obtained an order to wind up the joint venture on the basis that the underlying purpose of the business had failed.
Key takeaways
A quick recap
In March 2020 the UK Government imposed unprecedented restrictions in the face of the Covid-19 pandemic in relation to the forfeiture of commercial leases by enacting the Coronavirus Act 2020 and other business support measures. These introduced the following key restrictions on rent arrears recovery:
This week’s TGIF considers an application to wind up a company on just and equitable grounds. The Court declined to make the order, finding the suggested deadlock had an air of artificiality and the application was infused with self-interest.
Key takeaways
This week’s TGIF considers the decision of the Supreme Court In the matter of IW4U Pty Limited (In Liquidation) [2021] NSWSC 40, where the liquidators failed to recover compensation despite establishing contraventions of directors’ duties following an apparent phoenix.
Key takeaways
This week’s TGIF considers the decision in Nikitins v EncoreFX (Australia) Pty Ltd (No 2) [2021] FCA 27, where the Federal Court found that funds paid into a holding account for the provision of foreign exchange services were held on trust and were not property of the liquidation.
Key takeaways