The recent Supreme Court of New South Wales decision of Fitz Jersey Pty Ltd v Atlas Construction Group Pty Ltd (in liq)1 clarifies that s 588FF of the Corporations Act permits an assignee of a liquidator’s voidable transaction claim to trace a company’s property or proceeds for the purposes of the assignee’s recovery proceedings.
Practitioners will be pleased to know that the NSW Supreme Court has provided clarity on the order of priority for employee debts and secured creditor claims.
The matter, In the matter of Spitfire Corporation Limited (in liquidation) and Aspirio Pty Ltd (in liquidation), involved the liquidators of two insolvent companies (Spitfire Corporation Ltd and Aspirio Pty Ltd) seeking directions under s 90-15 of the Insolvency Practice Schedule (Corporations).
Where the key asset of a technology start up is a potential entitlement to an R&D tax refund, the Spitfire decision provides important clarity for financiers of such businesses, as well as for liquidators (and employees) of those businesses which fail.
In its recent decision in Walton v ACN 004 410 833 Limited (formerly Arrium Limited) (in liquidation) [2022] HCA 3 (Walton), the High Court of Australia held, in a split decision, that the mandatory public examination power contained in section 596A of the Corporations Act 2001 (Cth) (the Act) could be used by eligible applicants to examine directors and other officers of a company in external administration, including senior management, external administrators and trustees, about the company’s affairs for the broad purposes of enforcing and promoting comp
When a corporate trustee goes into liquidation, there is often uncertainty about how it is to be wound up which requires Court intervention. On 15 October 2021, the Federal Government initiated a consultation process relating to trusts and insolvency, which looks to consider, amongst other things, what powers an external administrator has to administer trust property.
This week’s TGIF considers Australian Vocational Learning Institute Pty Ltd (in liq), in the matter of Australian Vocational Learning Institute Pty Ltd (in liq) [2022] FCA 319, a Federal Court of Australia decision on the approval of a funding agreement between the Commonwealth government and a liquidator.
Key Takeaways
The federal government has announced plans to further reform Australia’s insolvency laws.
On 30 March 2022, the Assistant Treasurer announced that the government intends to:
• simplify the unfair preference rules so that transactions between a company and a creditor of less than $30,000 or that are made more than 3 months before the company entered external administration aren’t able to be clawed back by the company’s liquidator
This week’s TGIF considers In the matter of Guided Knowledge Group Pty Ltd [2022] NSWSC 255 in which a liquidator sought approval for his remuneration under Schedule 2 of the Corporations Act 2001 (Cth).
Key Takeaways
Thorn (liquidator), in the matter of South Townsville Developments Pty Ltd (in liq) (Company) involved an ex parte application by a liquidator seeking approval under section 477(2B) of the Corporations Act 2001 (Cth) (Corporations Act) to enter into agreements to fund existing litigation and a request for the suppression and non-publication of certain details in those agreements.
Background
Letters of support take many forms and are issued for a variety of purposes and can generate a serious tension between the interests of various stakeholders — parents, subsidiaries, boards and auditors.