Greylag Goose Leasing 1410 Designated Activity Company v P.T. Garuda Indonesia Ltd

In a decision that appears to be the first of its kind, the NSW Court of Appeal has found that a national airline should be afforded foreign State immunity against a winding up application.

Key points:

Introduction

In a previous article, 'In case of emergency: Using emergency power provisions to appoint a voluntary administrator' we discussed the use of emergency powers in a company’s constitution to appoint a voluntary administrator to a company, as well as the use of court assistance to cure defects in an appointment.

High Court's Landmark Decisions Clarify the Position for Creditors and Liquidators in Insolvency Proceedings

Navigating cross-border bankruptcy: Gilbert + Tobin has assisted in the recognition of foreign bankruptcy proceedings in Australia, acting for the trustees in bankruptcy in a successful application to recognise Singaporean bankruptcy proceedings.

Background

When a company becomes financially distressed, directors are often required to act quickly and decisively. However, directors may at the same time find themselves held back by the requirements of the Corporations Act 2001 (Cth) (the “Corporations Act”) or their company constitution.

What is now known as the ‘ipso facto regime’ was introduced by the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Act 2017 in September 2017, which inserted a number of provisions that provided for a stay on the exercise of certain ipso facto contractual rights in the context of corporate restructuring and insolvency procedures.

What is an ipso facto clause?

Corporate Australia is bracing for the long-awaited surge in insolvencies. As Australia’s largest creditor and, according to creditor reporting bureau Creditor Watch, responsible for the greatest number of company windups prior to the pandemic in 2019, the ATO can fairly be described as an influential, if not dominant, player in the restructuring and turnaround space and in corporate Australia more broadly.

The ATO effect

Contents:

Overview of corporate insolvency in Australia

On 28 September 2022, the Federal Government, through the Parliamentary Joint Committee on Corporations and Financial Services (the Committee) commenced an inquiry into the effectiveness of Australia’s corporate insolvency laws in protecting and maximising value for the benefit of all interested parties and the economy.