Orla McCoy explains the connections between retention of title clauses, insolvency, and the Personal Property Securities Act.

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The important role of standard terms of sale

The standard terms of sale of a supplier can form part of a credit application by its customer, appear on sales invoices or order forms or on the supplier’s website and there are many other combinations of documentation and procedures that can be used to establish written evidence of the terms of the contract between the supplier and its customer. Just as important, there are many reasons why these combinations may come unstuck.

SFC released consultation conclusions on supervisory assistance. The Hong Kong Securities and Futures Commission (SFC) released consultation conclusions on proposed amendments to the Securities and Futures Ordinance (SFO). The amendments would provide assistance to regulators outside of Hong Kong upon request by making inquiries and obtaining certain records and documents from licensed corporations or their related corporations. The proposed supervisory assistance will be subject to both existing and new legislative safeguards.

Key Points:

These three cases illustrate that strict compliance with legislative requirements continues to be imperative when serving statutory demands.

Despite what appears to be a fairly straightforward legislative regime, creditors' statutory demands appear to generate an entirely disproportionate volume of litigation in the courts. The drastic consequences of failing to comply with a creditor's statutory demand warrant very strict compliance by creditors with the technical requirements of the regime.

Liquidators and Trustees in Bankruptcy - Claw-Back

Sometimes service providers feel that they should not get involved to assist financially troubled clients obtain work-out or insolvency advice in fear that if their client goes into liquidation or bankruptcy that the WIP and/or fees/costs paid may be lost or "clawed back" by a liquidator because of an unfair preference claim.

The Federal Court of Australia has recently issued a decision clarifying the breadth of its powers under the Cross-Border Insolvency Act 2008 (Cth) (the Act).

Another judgment has been handed down in the ongoing dispute between the MFS/Octaviar liquidators and Fortress Credit Corporation (Australia) II Pty Ltd (Fortress). In this latest decision, the NSW Court of Appeal has confirmed that a creditor can attack a litigation funding agreement entered by a liquidator.

The relevant facts were as follows:

BACKGROUND

In brief - Well drafted trading and credit terms can help your company avoid bad debts

Seeking director's guarantees, following your credit policies and including recovery costs, interest clauses, general security and retention of title clauses in your trading terms can help you manage cash flow and prevent bad debts.

Company liquidation often due to poor management of cash flow

The reform agenda for Australia's restructuring and insolvency regime has now received the views of the Productivity Commission, in the context of its wider review of Business Set-Up, Transfer and Closure.  A draft report published on 21 May 2015 sets out a number of recommendations that, while mostly not new to the reform agenda, will be relevant to restructuring and insolvency professionals in the not-too-distant future.