On 11 September 2017, major reforms to Australia's insolvency laws including an insolvent trading safe harbour and a restriction on the enforcement of ipso facto rights in certain circumstances passed through the Senate. These insolvency reforms amend relevant provisions of the Corporations Act.

The safe harbour provisions commenced on 19 September 2017.

In a big 24 hours for restructuring and insolvency, the safe harbour reforms were passed by the Senate late last night, and anti-phoenixing reforms were announced this morning.

Safe harbour reforms

The safe harbour laws will commence operation the day after the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill 2017 receives Royal Assent, with the ipso facto provisions set to commence on 1 July 2018 (or earlier by proclamation).

To perfect a security interest by possession, a secured party must have actual or apparent possession of the property. A contractual right to possess is not enough.

We now have the first judicial guidance in Australia on the concept of "perfection by possession" under the Personal Property Securities Act 2009 (PPSA) (Knauf Plasterboard Pty Ltd v Plasterboard West Pty Ltd (In Liquidation) (Receivers and Managers Appointed) [2017] FCA 866).

What is "perfection by possession"?

El Tribunal Supremo reitera, en su sentencia de 5 de mayo de 2017, su doctrina relativa a la acción individual de responsabilidad de los administradores y la necesidad de que además de probarse el daño se demuestre la existencia de una conducta del administrador, ilegal o carente de la diligencia de un ordenador empresario, así como la existencia del nexo causal entre la conducta y el daño.

The limitations of set-off in a liquidation scenario and the nature and effect of a security interest under the Personal Property Securities Act 2009 (Cth) (PPSA) have been clarified, with significant ramifications for principals and financiers, who should now review their rights, following the WA Supreme Court's decision in Hamersley Iron Pty Ltd v Forge Group Power Pty Ltd (In Liquidation) (Receivers and Managers Appointed) [2017] WASC 152 (Clayton Utz acted for the successful receivers).

Safe harbour and ipso facto clauses reforms are closer, with the consultation on the Insolvency Laws Amendment Bill 2017 having closed last week, but further work is needed.

The Federal Government's consultation on the safe harbour and ipso facto reforms in the draft Insolvency Laws Amendment Bill 2017 closed on 17 May 2017, so we now have a better idea of what they will look like.

El Tribunal Supremo desestima, en su sentencia de 13 de marzo de 2017, el recurso de casación presentado por una sociedad en concurso de acreedores que pretendía el pago por parte de una sociedad a la que había transmitido ciertos activos durante el concurso, de la cantidad que se acordó retener por las partes en concepto de gastos a cargo del vendedor, argumentando que no se admite en sede de concurso la compensación de créditos (ex. art. 58 LC, que proscribe la compensación de los créditos concursales).

El Tribunal Supremo confirma que la atribución de un privilegio especial, en caso de créditos garantizados con prenda sobre derechos de crédito futuros, depende de que la relación de la que emana el crédito ofrecido en garantía existiera antes de la declaración de concurso.

Assets held by an insolvent corporate trustee in its capacity as trustee may not be "property of the company".

For more than 30 years, Victoria has stood apart from the rest of Australia in how it treats the assets of an insolvent corporate trustee. That may have changed, following the Supreme Court's decision in Re Amerind Pty Ltd (receivers and managers appointed) (in liq) [2017] VSC 127.

El Tribunal Supremo rechaza el ejercicio de las acciones rescisorias especiales del Derecho concursal contra una escisión de sociedades inscrita en el Registro Mercantil, y afirma que la protección de los acreedores debe realizarse por vía resarcitoria.