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:
Introduction
In most cases, the precondition for the appointment of a liquidator and the winding up of a company by a court is that a company is insolvent. However, in some cases courts will make these orders in the context of a shareholders dispute where there is a management deadlock or a breakdown in trust and confidence between shareholders. Additionally, a court may make these orders where there has been serious fraud or mismanagement in the conduct of a company’s affairs.
Relevant law
This week’s TGIF considers In the matter of Banksia Securities Limited (in liquidation) (receivers and managers appointed)[2016] NSWSC 357 in which the Court uses its broad remedial powers to appoint special purpose receivers.
BACKGROUND
The Federal Court of Australia in Kelly v Willmott Forests Ltd (in liquidation) (No 4) [2016] FCA 323 rejected an application for approval of settlement under s 33V of the Federal Court of Australia Act 1976 (Cth), confirming that the Court’s role is akin to a ‘guardian’ for the group members.
Background
When pursuing outstanding owners corporation fees, suing the right person or entity at the right time is critical.
If you get this wrong, you will not recover any money.
So, who is the owner?
Section 3 of Owners Corporations Act 2006 and the Subdivision Act 1988 state:
“an owner is a person who has an estate in fee simple in the land (except a mortgagee), or is empowered by or under an Act to convey an estate in fee simple in the land in an identified folio under the Transfer of Land Act 1958.”
On 29 April 2016, the Australian Government Treasury released a proposal paper that, among other things, proposed reforms to introduce an ipso facto moratorium (Proposal). This reform was foreshadowed in as part of the Australian Government’s National Innovation and Science Agenda.
On 29 April 2016, the Australian Federal Government (Government) announced three major insolvency law reform proposals in its Improving Bankruptcy and Insolvency Laws Proposal Paper1 (Proposal). The Government has invited submissions from stakeholders and given this is a rare opportunity to undertake substantial reform, we strongly encourage involvement.
Summary
The recent New South Wales Supreme Court decision in Re HIH Insurance Ltd (In Liquidation)1 has potentially significant implications for securities class actions where there are allegations that a listed company has failed to disclose material information to the market and/or engaged in misleading and deceptive conduct causing the company's shares to trade at an inflated price.
The Australian Government is proposing to constrain certain "ipso facto" clauses ‒ a move which could make flip clauses void. The closing date for submissions is Friday 27 May 2016.
How would changes to ipso facto clauses affect securitisation?