The Patent Office's decision in McCann as Liquidator of ACN 137 233 919 v Molnar [2017] APO 30 explores interesting territory for liquidators and insolvency professionals – the intersection of insolvency and intellectual property.
On 2 October 2015, a company which had gone into liquidation, Sax, filed a request to amend the ownership of a patent application from itself to its sole director, Ms Molnar, pursuant to a sale agreement by which Sax had sold all of its intellectual property to Ms Molnar for $55,000. The Patent Office recorded the amendment on 16 October 2015.
Some of the most far-reaching Australian insolvency law changes are taking effect. These new laws will restrict the enforceability of a whole class of common clauses in contracts –so called 'ipso facto' clauses.
In this edition of FINSights, we explore what these changes mean for financiers, and outline key tips and issues they should consider as we move forward into the new regime.
What are ipso facto clauses?
Introduction
In late 2015, the High Court handed down its decision in Commissioner of Taxation v Australian Building Systems Pty Ltd (in liq) [2015] HCA 48. The High Court held (by a majority of 3:2) that, in the absence of an assessment, a liquidator is not required to retain funds from asset sale proceeds in order to meet a tax liability which could become payable as a result of a capital gain made on the sale. In doing so, the majority of the High Court affirmed the decision of the Full Federal Court and provided long awaited guidance to liquidators, receivers and administrators.
On 28 March 2017, the Australian Government announced its proposals to reform the law relating to insolvent trading, and the right to terminate contracts based on insolvency ('ipso facto clauses'). MinterEllison made a detailed submission on the proposals which can be found here.
Kai Zeng and Kon M Asimacopoulos, Kirkland & Ellis
This is an extract from the first edition of GRR's The Art of the Ad Hoc. The whole publication is available here.
The purpose and role of ad hoc committees from a debtor’s perspective: the initial phase
Yushan Ng and Helen Ward, Cadwalader Wickersham & Taft
This is an extract from the first edition of GRR's The Art of the Ad Hoc. The whole publication is available here.
Chris Howard, Sullivan & Cromwell
This is an extract from the first edition of GRR's The Art of the Ad Hoc. The whole publication is available here.
The relationship of an ad hoc committee with its stakeholder constituency
No power to bind: the importance of the underlying finance documents in relation to decision making
Nick Angel, Peter Newman and Edward Rasp, Milbank LLP
This is an extract from the first edition of GRR's The Art of the Ad Hoc. The whole publication is available here.
Role and powers
Yen Sum and Lucy Cox, Sidley Austin
This is an extract from the first edition of GRR's The Art of the Ad Hoc. The whole publication is available here.
How many committees?
In a capital structure involving multiple external debt tranches, one of the first questions that arises is the number of committees that will be required.