Last week the Supreme Court of New South Wales provided another timely reminder to ensure that all security interests are correctly registered on the Personal Property and Securities Register (PPSR) through the decision In the matter of OneSteel Manufacturing Pty Ltd (administrators appointed) [2017] NSWSC 21.
The facts
Alleasing Pty Ltd leased a crushing and screening plant (for approximately $4 million annually in rent) and spare parts for the crusher to OneSteel Manufacturing Pty Limited.
Failing to register a lessor’s security interest on the PPSR over plant and equipment at leased premises can result in the lessor’s unperfected security interest passing to the administrator of the lessee.
In the recent decision of Flown Pty Ltd v Goldrange Pty Ltd [2016] WASC 419, a lessee’s administrator successfully retained ownership of plant and equipment (which were not fixtures) in the leased premises.
Background
In the recent case of Hadley v BetHQ Pty Ltd [2016] FCA 1263, the debtor company, BetHQ, came to grief when a statutory demand was validly served at the company’s registered office in Brisbane as shown in ASIC records. The premises were a serviced office; however BetHQ had ceased operations at the serviced office and had moved its operations to Victoria.
When a secured creditor appoints a receiver it is usual for them to sign an agreement setting out the terms of the receiver’s appointment, including payment of the receiver’s remuneration, costs and expenses. Appointment documents commonly contain indemnity clauses in which the secured creditor agrees to indemnify the receiver in specified circumstances.
I CORPORATE FINANCE, COVENANTS AND CREDITOR’S LIABILITY 2 II NATIONAL LEGISLATION 4 III EUROPEAN LEGISLATION 5 IV NATIONAL CASE LAW 5 NEWSLETTER I CORPORATE LAW WWW.CUATRECASAS.COM NEWSLETTER I CORPORATE LAW 2/6 CORPORATE LAW NEWSLETTER I CORPORATE FINANCE, COVENANTS AND CREDITOR’S LIABILITY Introduction In the field of corporate finance the liability of creditors that negotiate covenants with companies is an issue that currently generates great concern.
Supreme Administrative
Court Judgement of October 12, 2016
Case no. 0797/15
In this Judgment, the Supreme Administrative Court concluded that expenses related to employees, recorded as remuneration, salaries or wages, relevant to the limit of 15% foreseen for acceptance of the expenses with social benefits referred to in Article 43.2 of the CIT Code, are not limited to those that were subject to mandatory Social Security contributions.
South Central Administrative Court
Judgement of October 13, 2016
In judgment 297/2016 of September 22, 2016, by Commercial Court No. 6 of Madrid, the court rejects the appeal filed by a dissenting entity affected by a court-sanctioned refinancing agreement. The appeal argued the existence of a disproportionate sacrifice due to the standstill of the notarial enforcement of a pledge on shares already executed.
In its judgment 500/2016 of July 19, 2016, the Supreme Court interprets article 62.4 of the Insolvency Act, regulating the effects of contract resolution during insolvency:
If an agency agreement is resolved due to the agent being declared insolvent, the business owner must compensate the agent for clientele if the requirements under the Agency Act are met (the agent brought new clients or clearly increased transactions with existing clients, and the previous activity is still beneficial for the business owner).
In its writ dated February 2, 2016, the First Instance Civil Court No. 38 of Barcelona raised a preliminary issue to the Court of Justice of the European Union. In that writ, it requested the EU court to determine whether the business practice of assigning or buying credits without offering consumers the possibility to settle the debt by paying the assignee the outstanding amount is in line with EU law.