The proposed scaling back of directors' liability provisions is good news for insolvency practitioners.
In good news for insolvency practitioners, the NSW Government formally adopted the Council of Australian Governments guidelines on "Personal Liability for Corporate Fault" as NSW policy on 31 July 2012 .
What are the "Personal Liability for Corporate Fault" guidelines?
Background
A recent Federal Court of Australia decision in the administration of the Hastie Group Limited (Hastie Group)1 illustrates a number of important points for administrators, secured parties and purchasers under the new regime established under the Personal Property Securities Act 2009 (Cth) (PPSA). If you would like to discuss the implications of this case with any of our PPSA or insolvency litigation experts, please do not hesitate to contact us.
The facts
The recent Victorian Supreme Court decision of Grapecorp Management Pty Ltd (in liq) v Grape Exchange Management Euston Pty Ltd [2012] VSC 112 clarifies the application of set-off provisions for insolvent companies.
BACKGROUND
Grape Exchange Management Euston Pty Ltd (Grape Exchange) provided various services in relation to vines and grapes, pursuant to a Management Agreement with Grapecorp Management Pty Ltd (in liq) (Grapecorp).
Grape Exchange claimed that it had a right of set-off under section 553C of the Corporations Act.
At the end of 2011, the Federal Government introduced two draft Bills directed at clamping down on companies that engage in “phoenix” activity.
On 21 December 2011, the New South Wales Court of Appeal (Court) delivered its decision in Moss v Eaglestone (2011) 257 FLR 96. This decision clarifies the circumstances in which legal causes of action will be considered property divisible amongst a bankrupt’s creditors.
Background
In 2007, Moss supplied information regarding Schapelle Corby to Nationwide News Pty Ltd (News). News published this information in a newspaper article, which also referred to Moss’s criminal background.
In our March 2012 Insurance Update we considered the potential widening of the scope for creditors to claim damages against a director personally for contravention of the Corporations Act 2001 (Act). The Supreme Court of Queensland awarded Phoenix Constructions over $1.2 million in damages against Mr McCracken for contravention of s 182 of the Act. This decision, a first of its kind, was appealed by Mr McCracken.
If you are planning a corporate reconstruction, then this Bulletin is relevant to you. This bulletin focuses on the amendments to the Duties Act in relation to the exemption from stamp duty available in relation to a corporate reconstruction.
On 11 April 2012, the State Revenue Legislation Amendment Act 2012 No. 20 (Amending Act) was passed.
The recent case of Deputy Commissioner of Taxation v Bayconnection Property Developments Pty Limited [2012] FCA 363 is a rare example of the Court allowing an adjournment of a winding up application in connection with a tax debt pending an appeal.
Facts
In Peter Grossman v Australian Securities and Investment Commission [2011] AATA 6, the Administrative Appeals Tribunal upheld a 5 year disqualification period against former director Mr Grossman who was at the helm of 3 companies that met financial demise. The Tribunal affirmed ASIC’s decision to grant the maximum disqualification period made pursuant to s 206F of the Corporations Act which was returned after finding Mr Grossman participated in phoenix activities deemed to lack commercial morality and blatantly disregard the interests of creditors.
On 7 December 2011, the Supreme Court of New South Wales (Court) delivered its decision in In the matter of Nugisi Pty Ltd [2011] NSWSC 1512, clarifying the circumstances in which courts will allow the appointment of a provisional liquidator.
Facts