Restructuring: Rollovers, Small business restructure rollovers and small business CGT concessions
July 2017
Linda Tapiolas Partner
T 61 7 3231 2562 M 0437 200 334
Level 21, 400 George Street Brisbane 4000 Australia
GPO Box 834, Brisbane 4001 www.cgw.com.au
In December 2015, the Federal Government proposed changes to its insolvency laws as part of its National Innovation and Science Agenda (NISA). Changes included a proposal to reduce the minimum bankruptcy period from three years to one year, with the aim of encouraging innovation and risk taking by reducing the consequences associated with bankruptcy.
The Queensland Supreme Court in the case of Scott & Ors v Port Hinchinbrook Services Limited & Ors [2017] QSC 92 has again confirmed the utility of a Deed of Company Arrangement (DOCA) in respect of director appointments and members’ rights as part of a restructure.
Issues
The Court was asked to consider the following issues:
On June 6, 2017, Australian-based mining equipment supplier Emeco Holdings emerged from chapter 15 proceedings in the Southern District of New York following an Australian court’s sanctioning of the company’s scheme of arrangement.
The scheme of arrangement was a component of an innovative, comprehensive restructuring that provided for a three-way merger of three large Australian mining service companies and a restructuring of A$680 million of debt through a debt-for-equity swap, rights offering, and full refinancing.
Insolvency in the construction industry is a perennial concern for contractors who can be thinly capitalised and depend on reliable cash flow to meet obligations to staff and suppliers.
One of the harbingers of the end of the mining boom in Western Australia was the collapse of the Forge Group in early 2014. Forge Group Ltd (Forge) and the companies associated with it were substantial players in the mining services sector. Towards the end of 2013 Forge went into an extended trading halt arising from concerns about its ability to meet debt covenants. In early 2014 the company announced that it had reached a deal with its bank, ANZ, which would “solve the liquidity issues and strengthen Forge Group’s balance sheet”.
For some time liquidators have been without a great deal of guidance as to how to approach the sale of trust assets where a corporate trustee has entered into liquidation. Generally, when such an appointment occurs, the trust deed will provide for an automatic vacation of the trustee’s position. Clearly, where a company holds assets in its capacity as trustee, it has a right of indemnity against the trust in respect of any and all debts it properly incurs in that capacity.
A PRETTY UNATTRACTIVE OUTCOME
Craig Wilkins*
Introduction
This week’s TGIF considers what the UK decision of Simpkin v The Berkeley Group Holdings PLC [2017] EWHC 1472 means for insolvency practitioners seeking to access potentially privileged documents created by employees of appointee companies.
BACKGROUND
With effect from the commencement of the new financial year in July 2017, the Australian federal and state governments implemented a range of legal and regulatory changes, which could affect entities undertaking or contemplating investments in Australian land, companies or businesses or who are seeking to establish operations in Australia. We have summarised four of these key changes below.