In the event of a contractual counterparty going into liquidation, whether or not a trade counterparty may claim set-off against debts owed to the insolvent counterparty can dramatically affect the commercial position of the account debtor. This was recently highlighted in the decision of Hamersley Iron Pty Ltd v Forge Group Power Pty Ltd (In Liquidation) (Receivers and Managers appointed) [2017] WASC (2 June 2017).
What does this mean for you?
On 19 May 2017, the PersonalProperty Securities Amendment (PPS Leases) Act 2017 (Cth) (Amendment Act) received Royal Assent and is now effective. The Amendment Act has changed the definition of a "PPS Lease" (PPS Lease) under the Personal Property Securities Act 2009 (Cth) (PPSA).
Key points summary
Following the recent high-profile appeal decision, the Supreme Court of New South Wales has now finalised the saga that was the review and approval of the remuneration of the Liquidator of Sakr Nominees.
From that decision emerge several key points for insolvency professionals when considering their remuneration:
Whether you are a liquidator, director, employee, shareholder or creditor of a company in financial distress, the experience of a corporate insolvency is usually not pleasant. Directors face the threat of being investigated for breaches of directors duties, employees become unemployed, shareholders become the owners of worthless assets and creditors are forced to come to the realisation that they will never see the money owed to them (or at least not all of it).
The recent decision of Markovic J in Robert Kite and Mark Hutchins in their capacity as liquidators of Mooney’s Contractors Pty Ltd (in liq) & Anor v Lance Mooney & Anor [2017] FCA 653 in the Federal Court of Australia provides practitioners with further clarification of the requirements when insolvency practitioners are appointed to companies which operate as corporate trustees.
KEY TAKE-HOMES FOR INSOLVENCY PRACTITIONERS
The Supreme Court of New South Wales recently considered section 420A of the Corporations Act2001 (Cth) (the Act) in the context of a Receiver selling secured property without first advertising and offering the property for sale by auction.
The proposed schemes of arrangement for certain creditors of Boart Longyear Limited (BLY) - following very recent decisions in New South Wales at trial and now appellate level - are significant for restructuring and distressed investing professionals transacting in Australia. In particular, those decisions explore the principles for separation of affected creditors into classes, and highlight that different treatment of creditors in the same class does not of itself lead to division of those differently treated creditors into separate classes.
Seeking directions from the Court in the period 1 March to 1 September 2017 – what are liquidators and administrators to do?
This week’s TGIF considers the recent proposals to crackdown on rogue directors and reduce the burden on FEG to pay unpaid workers.
A last resort – but for who?
On 17 May 2017, the Federal Government published a consultation paper inviting submissions on options for law reform to address corporate misuse of the Fair Entitlements Guarantee (‘FEG’) scheme.
In the recent Federal Budget, one change that hasn’t been given media attention is a change to the GST Legislation, which is to become effective from mid-July 2018 whereby purchasers of ‘new constructed residential premises’ and ‘new subdivisions’ become responsible to remit the GST to the Australian Taxation Office (ATO).
The Government has not published any details as to how these changes are going to operate other than claiming that the ATO expects to recover upwards of $650 million in GST revenue over the next four years.