In the recent decision of Lane (Trustee), in the matter of Lee (Bankrupt) v Deputy Commissioner of Taxation [2017] FCA 953, Cooper Grace Ward acted for the trustee in bankruptcy, who sought directions from the Court regarding the administration of a trading trust where the bankrupt was the trustee.
Facts
Restructuring: Rollovers, Small business restructure rollovers and small business CGT concessions
July 2017
Linda Tapiolas Partner
T 61 7 3231 2562 M 0437 200 334
Level 21, 400 George Street Brisbane 4000 Australia
GPO Box 834, Brisbane 4001 www.cgw.com.au
Section 477(2B) of the Corporations Act 2001 (Cth) provides that a liquidator must not enter into any sort of agreement that may last longer than three months without first obtaining approval of the Court, of the committee of inspection or by a resolution of the creditors.
Typically, a litigation funding agreement will be caught by this section because it will last more than three months.
The reference to ‘enter into an agreement’ could also catch a novation, and potentially a variation, to an agreement.
Introduction
Luxembourg recently adopted a number of legislative reforms aimed at modernising the rules applicable to commercial companies. In relation to the restructuring and insolvency of Luxembourg-based entities, Parliament is discussing the long-awaited Bill 6539 (the so-called 'Insolvency Bill').
In the meantime, a number of reforms which could affect the restructuring and insolvency of commercial companies have been adopted, including:
All Australian states have sale of goods legislation that, in certain circumstances, allows an unpaid seller to retain possession of goods in transit where the buyer becomes insolvent. The statutory right, called stoppage intransitu, is a useful remedy to obtain payment.
A registered security interest on the PPSR is not required to exercise the statutory right. Administrators and liquidators may be trumped by a notice under the stoppage in transitu provisions.
However, the sale of goods legislation is not identical in each state.
Competing claims to goods are common where there is an unpaid seller with alleged retention of title, the supplier’s customer has gone into external administration and the goods are in the possession of a transport or warehouse provider. Thrown into the mix may be an administrator or liquidator demanding possession of the goods to sell them.
The recent case of M Webster Holdings Pty Limited (administrators appointed) v Specific Freight Pty Limited [2017] FCA 269 illustrates how a transport provider can become ‘the meat in the sandwich’ when a consignee of goods becomes insolvent.
Webster, a fashion retailer, operated two well-known Australian businesses, David Lawrence and Marcs. Webster was placed into administration in February 2017 and its administrators continued to trade with a view to securing a purchaser.
A bill containing an entirely new Insolvency Code was presented to the House of Representatives on 20 April 2017. The need for a robust insolvency framework has received substantial attention due to the ongoing economic and financial crisis. Many European countries have recently modernised their insolvency legislation or are in the process of doing so.
In the framework of the digitization of the Belgian judiciary, a central Solvency Register (www.regsol.be) will be available as of 1 April 2017.
Henceforth, creditors must file their claims electronically. The register will be accessible - subject to different procedural formalities - to magistrates, including substitute judges, clerks of court and public prosecutors as well as bankrupt parties, their creditors and counsel.
In a judgment of 24 March 2017 (in Dutch), the Supreme Court of the Netherlands upheld the longstanding requirement that for a debtor to be declared bankrupt, there need to be at least two creditors.