In March 2020, the Australian Government introduced new measures to relax the laws relating to insolvency and bankruptcy to assist businesses and individuals who may be facing financial distress.
Today, the Federal Government confirmed that these protections will now remain in force until 31 December 2020. We summarise the safeguards below:
The Australian Federal Government has announced the temporary amendments to insolvency and corporations laws will be extended until 31 December 2020 in light of the continuing challenges of COVID-19.
In brief
This week’s TGIF examines a decision of the Supreme Court of Victoria in which an unfair preference claim was defended on the basis that the liquidators had been invalidly appointed and lacked standing to continue the proceeding.
Key takeaways
The Virgin Airlines insolvency has shed new light upon aircraft repossession procedure under the Cape Town Convention.
In Wells Fargo Trust Company, National Association (trustee) v VB Leaseco Pty Ltd (administrators appointed) [2020] FCA 1269 (3 September 2020), Justice Middleton in the Federal Court of Australia, decided two issues:
On 14 May 2015, Australia acceded to the Convention on International Interests in Mobile Equipment (“Cape Town Convention”) and the Protocol to the Cape Town Convention (“Cape Town Protocol”). In particular, for insolvency related proceedings, Australia adopted what is known as “Alternative A” in aviation industry speak. The Cape Town Convention became effective as Australian law on 1 September 2015 and applies to the relevant aviation leasing and financing transitions entered into after that date.
Australia and the United States have much in common. We have a shared history, a common language, and a similar common law-based legal system governing a federated nation occupying a large land mass blessed with abundant natural and human resources. The United States is one of Australia’s greatest trading partners, and we welcome inward investment from the U.S. with most favoured nation trade terms. We also enjoy a friendship and strategic alliance that goes back over a century.
Ford (Administrator), in the matter of The PAS Group Ltd (Administrators Appointed) v Scentre Management Ltd [2020] FCA 1023
Factual background
Commercial landlords are exposed to a range of risks from the economic and social consequences of the COVID-19 pandemic. One new risk to be confronted will come from the increased prevalence of rental deferrals and interaction with the Australian insolvency regime over ‘unfair preferences’.
Why is rent ‘protected’ in normal trading conditions?
Dominic Emmett and Hannah Cooper, Gilbert + Tobin
The Australian federal government, like many governments across the globe, has enacted temporary legislative changes to provide relief for businesses that have been impacted by the economic effects of the covid-19 pandemic. In order to facilitate continued business operations, the changes provide companies with breathing space to respond to demands from creditors for overdue debts and protect company directors from insolvent trading claims for debts incurred during the covid-19 period.
In Parbery & Ors v QNI Metals Pty Ltd & Ors[1] the Court held, amongst other things, that: