The Tribunal of Milan with a decision of 12 June 2014 took a stand which is in sharp contrast with mainstreamcase-law, with respect to clauses – widely used as common practice in distressed assets deals as part of“concordato preventivo” restructurings based on an interim lease of business period while the insolvencyproceeding is pending – allowing the lessee to apply rental fee payments to the final purchase price of the business,once the “concordato” is confirmed and the sale can take place

With judgment No. 10105 of 9 May 2014, the Italian Supreme Court of Cassation ruled that trusts can be recognized inItaly, when the settlor is insolvent, only if they are consistent with the purposes of the procedure.

The Case

With judgment No. 5945 of 11 March 2013, the Italian Supreme Court of Cassation addressed a key issue under EC Regulation No. 1346/2000: the location of the “center of main interests” (COMI) of the company according to factors recognizable by third parties.

The Case

The Court of Milan with a decision on 28 May 2014 addressed some heavily debated legal issues: the Bankruptcy Courtmay authorize the debtor to terminate credit facility agreements when the debtor submitted a pre-filing for concordato preventivo (known as “concordato con riserva”)?

The Case

A recent Victorian case has worrying implications for financiers and creditors.

A decision of the Victorian Court of Appeal in Vasudevan v Becon Constructions (Australia) Pty Ltd [2014] VSCA 14 has the potential to significantly broaden the power of a liquidator to attack a company transaction under section 588FDA of the Corporations Act 2001 (Act) where there are ‘indirect benefits’ to a director or close associate of a director of the company.

Obtain advice before you lodge a proof of debt or vote in a liquidation

Secured creditors should remember that submitting a proof of debt and voting in a liquidation may result in the loss of their security if they get it wrong.

The Supreme Court of New South Wales has delivered a timely reminder to secured creditors of a company in liquidation, where the secured creditor lost its security because it submitted a proof of debt for the full amount of its debt and voted on a poll at a creditor’s meeting for its full debt.

Liquidators are commonly appointed to a company where, prior to liquidation the company was a trustee of a trust. Often when the liquidators are appointed, the company has ceased to be the trustee and a replacement trustee has not been appointed.

In these circumstances, the company in liquidation is a bare trustee in relation to the trust assets and the liquidator will assume this role until a replacement trustee is appointed. Often a replacement trustee is not appointed.

Does the liquidator as bare trustee have a power to sell trust assets?

Secured creditors should not allow a liquidator to sell a secured asset without first:

If your terms of trade documents don’t have the correct provisions, you can lose goods supplied to a customer that becomes insolvent, even though you may have title to the goods.

A recent Supreme Court decision highlights the need for retention of title suppliers to have adequate terms of trade documents and to register security interests on the Personal Property Securities Register (PPSR) to avoid losing assets if a customer becomes insolvent.

The institution of composition with creditors enabling business continuity (Article 186-bis of the Bankruptcy Law) and its impact on the legislative framework of public contracts (on the matter see “Composition with creditors enabling business continuity in public contracts”, June 2013, in www.nctm.it/wp-content/uploads/2013/11/CPCP) have given rise to contrasting applications of case-law, and as matters stand, the institution is often applied in different ways.