The recent decision of the New South Wales Supreme Court in Independent Contractor Services (Aust) Pty Limited ACN 119 186 971 (in liquidation) (no 2) [2016] NSWSC 106 found that the statutory scheme of priority does not apply to realisations from circulating trust assets. This decision has potentially profound impacts for both employees and secured creditors in the context of both liquidations and receiverships.

A summary of the case

In Hussain v CSR Building Products Limited; In the matter of FPJ Group Pty Ltd (in liquidation) the Federal Court held that a retention of title (ROT) clause secures the purchase price of the goods it covers, and that payment of that price will not be an unfair preference since the creditor has not received payment of an “unsecured debt” within the meaning of section 588FA of the Corporations Act 2001 (Cth).

Major insolvency reform: Getting the (ipso) factos straight

In brief

In brief

This week’s TGIF examines the NSW Supreme Court decision In the Matter of Kevin Jacobsen Pty Limited (in liq) [2016] NSWSC 538 which considered a challenge to an application under s 477(2B) to assign a cause of action.

WHAT HAPPENED?

On 10 August 2015, the liquidators of Kevin Jacobsen Pty Limited (in liquidation) (KJPL) applied to the NSW Supreme Court for:

Insolvency reform: let’s not forget about the scheme of arrangement regime (again!)

In brief

On 23 February 2016, Justice Brereton of the Supreme Court of New South Wales handed down a decision In the matter ofIndependent Contractor Services (Aust) Pty Limited ACN 119 186 971(in liquidation) (No 2) that may significantly impact the economics of winding up of corporate trustees and the return to priority creditors such as employees.

In summary, the Court held that:

Background

On 7 December 2015, the Australian Government released its "National Innovation and Science Agenda" ("Agenda"). In the Agenda, the Government outlined its intention to make three significant reforms to Australia's insolvency laws, adopting the recommendations of the Productivity Commission ("Commission") in its report, "Business Set-Up, Transfer and Closure" ("Report"), released on the same day as the Agenda:

Key Points:

While shareholders may only need to establish indirect market causation, there are still significant obstacles for establishing shareholder claims.

Do plaintiffs in a shareholder class action have to show they relied upon misleading or deceptive conduct, or is it enough that the market in general relied upon them, which then affected the share price?

This week’s TGIF considers the decision of In the matter of THO Services Limited [2016] NSWSC 509 in which the Court exercised its general power to extend the voluntary administration moratorium period to a commercial arbitration.

BACKGROUND