A recent saga played out in the Supreme Court of NSW illustrates why the dispute resolution procedures available to strata owners under the Strata Schemes Management Act 2015 (NSW) make strata title superior to company title.
This is because company title property owners have only the blunt instruments of liquidation and administration available under the Corporations Act 2001 (Cth).
This article analyses how poorly the Corporations Act 2001 (Cth) is equipped to handle disputes between owners of company title properties.
The PAS Group decision reaffirms the principle that rent incurred during the administration period takes priority in the winding-up payment waterfall
Federal Treasurer Josh Frydenberg announced recently that the Commonwealth Government is considering extending aspects of the ‘regulatory shield’ implemented on 24 March 2020, which provided temporary relief from certain insolvency laws for financially distressed businesses.
A 20 June 2020 decision of Justice O’Callaghan in the Federal Court confirms that rent incurred during the ‘no liability’ period will be payable as a priority expense in the liquidation of an insolvent tenant. This is regardless of whether or not the no liability period has been extended by the Court on application by the administrators.
The key facts
This decision puts to rest some of the uncertainty which arose due to the NZCA's approach in Timberworld and helps to solidify liquidators' prospects of recovering maximum preferential payments.
Preferential payments can be an important source of funding for liquidators – and the recent decision in Bryant in the matter of Gunns Limited v Bluewood Industries Pty Ltd [2020] FCA 714 is a source of some relief for liquidators.
Timberworld – uncertainty over the impact on Australian liquidators
UPDATED 3 AUGUST 2020
Updates marked with *
Updated: Ireland, Israel
We take a look at some of the recent emergency legislation and measures implemented by various nations around the world in response to COVID-19. As this is a rapidly developing crisis, please ensure you keep a close eye on the Lexology Coronavirus hub page for the most up-to-date information.
The economic and social upheaval stemming from the COVID-19 pandemic has left the Australian not-for-profit sector searching for practices to ensure its viability in these uncertain times. As charities experience both increased costs and demand for their services, they may need to seek new avenues to generate revenue or manage their operations. Charities may consider exploring mergers and collaborations, or evaluating new commercialisation opportunities. In the event that a charity determines its operations are unviable, it may be forced to dissolve.
Corporate ventures are usually founded with the very best intentions, but as matters unfold disputes between investors are all too common.
The legal steps to resolve such disputes and assert control over a company can be complex and arduous.
However, there are good reasons for this due process, and it cannot be circumvented.
Illegal phoenix activity occurs when a company liquidates its operations to avoid paying its creditors, taxes and other regulatory payments. Before liquidation, the company transfers its assets to a newly created company which operates in the same, or similar industry and the same directors or close associates maintain control.
This week’s TGIF considers an appeal to the Full Court of the Federal Court for the termination of a deed of company arrangement , in circumstances where the appellants argued that liquidation of the company would provide a better return to creditors.
Key takeaways