ASIC has released its final statistics for the year on insolvency appointments and companies entering external administration, reporting on da

Liquidators are subject to rights and duties under common law and the Corporations Act 2001 (Cth) (CA).

The Federal Court has recently handed down a decision that clarifies the power of receivers to administer trust property under a debenture. In Benton, in the matter of Mackay Rural Pty Ltd (Receivers and Managers Appointed) [2014] FCA 1285, the Federal Court confirmed that section 420 of the Corporations Act 2001 (“the Act”) confers upon receivers a power to dispose of trust property, provided that this is necessary for the purpose for which they have been appointed.

FACTS

It is well-known that liquidators must be independent. If there is a reasonable apprehension that Liquidators lack independence, a Court may remove and replace them pursuant to the Corporations Act 2001 (Cth) (CA).

On 7 November 2014, the Treasury released the Insolvency Law Reform Bill 2014 (Bill) exposure draft for public consultation. There are a significant number of legislative changes (the exposure draft is 400 pages) proposed to be made to the Corporations Act 2001, the Bankruptcy Act 1966 and related laws. Submissions are currently sought.

On 7 November 2014, the Government released the draft Insolvency Law Reform Bill 2014, with key changes proposed to be put in place by 30 June 2015.

This case highlights that the fiduciary duty to avoid conflicts of interest in particular will be strictly adhered to, with questions of fairness or unfairness of the relevant transaction being irrelevant.  Directors are reminded of the need to take great care to manage potential risks when involved in transactions in which they are acting as director of more than one company.  In particular, directors should check the rules in the companies’ constitutions around conflict of interest and if there is any concern, disclose their interest and seek approval of the companie

The Supreme Court of Western Australia recently handed down its decision in Soil and Contracting Pty Ltd v Boban Pty Ltd [2014] WASC 402 which confirmed that, notwithstanding the operation of s 459R of the Corporations Act, the slip rule is available to extend the time limit within which a winding up application may be determined.

SECTION 459R

Turner v Gorkowski [2014] VSCA 248

Whether application seeking a declaration for or against the title of the trustee to a trustee in bankruptcy under s 58(1)(a) of the Bankruptcy Act 1966 (Cth) is a ‘special federal matter’ within the meaning of s 6(1) of the Jurisdiction of Courts (Cross Vesting Act) 1987 (Cth).

On appeal, the Victorian Supreme Court of Appeal transferred a proceeding initiated in the Supreme Court to the Federal Court.

In the lead up to peak periods, many businesses come under financial pressure due to various internal and external factors. Seasonal sales may not have been as planned and provision needs to be made for employee holiday pay.