The decision of Fielding as Liquidator of Lyngray Developments Pty Ltd (In Liquidation) v Dushas & Anor [2013] QCA55, overturned a Judgment at first instance where it was held that various payments made by a company to a close associate of a director of a company were not unreasonable director related transactions pursuant to Section 588 FE(6).
The Court of Appeal held that the payments did constitute unreasonable director related transactions and this decision provides guidance as to:
The Federal Magistrates Court of Australia decision of Dubow v Official Receiver & Anor [2013] FMCA 217 confirms that the Court’s discretion to annul bankruptcy is limited. Even if the discretion is enlivened, it appears that the Court will be reluctant to exercise its discretion where the bankruptcy has come about by the bankrupt’s own petition.
ASIC suspended the Australian Financial Services Licence of LM Investment Management Limited for two years this week for being an externally managed vehicle (voluntary administrators were appointed in March 2013). The practical effect of the suspension will mean that LM Investment Management won’t continue managing its nine funds. ASIC is also investigating the complex structure of the business and their related party transactions with the principal, Peter Drake.
Quite often we are asked to advise upon issues that arise in the context of creditor’s meetings. The following is a summary of commonly asked questions and commentary on the legal position, including a discussion of recent cases that have looked at each issue.
1. Can a 2nd creditor’s meeting be extended beyond the 45 day statutory period?
Case Note: Re Cardinia Nominees Pty Ltd [2013] NSWSC 32
Facts of the case
Cardinia Nominees Pty Ltd (Cardinia) agreed to lend Inika Pty Ltd (Inika) the sum of $750,000, in exchange for the issue of convertible bonds to Cardinia. The loan was secured by a charge in favour of Cardinia over the whole of Inika’s assets.
A Supreme Court decision has delivered a hefty blow to holders of HIH Holdings (NZ) convertible notes leaving them with little hope of recovering any of their investment.
The NSW Government has accepted some of the key recommendations of the Recommendations of the Independent Inquiry in Construction Industry Insolvency in NSW, including the introduction of bonds. We know that the Government will:
In the recent decision of MSI (Holdings) Pty Ltd v Mainstreet International Group Ltd [2013] QCA 27, the Court of Appeal considered the meaning and application of sections 471B and 471C of the Corporations Act.
BACKGROUND
The decision involved receivers who were appointed to MSI (Holdings) Pty Ltd (receivers appointed) (in liquidation) (MSI) by Central Coast Projects Pty Ltd (Central Coast) pursuant to a charge it held over all property, assets and rights of MSI.
On 19 April 2013, Justice Foster of the Federal Court of Australia handed down judgment in the case of Eopply New Energy Technology Co Ltd v EP Solar Pty Ltd [2013] FCA 356. The question before his Honour was whether a foreign arbitral award made in China ought to be enforced in Australia against an Australian company in liquidation.
The recent Supreme Court of New South Wales decision of AMC Commercial Cleaning (NSW) Pty Ltd v Stephen Keith Coade & Anor; Rockcliffs Solicitors & IP Lawyers v Schon Condon as liquidator of AMC Commercial Cleaning (NSW) (No 2) [2013] NSWSC 332 confirms that a liquidator may be personally liable to pay costs where the liquidator initiates proceedings to claim funds for the company in liquidation.