This week’s TGIF considers a recent decision of the Supreme Court of Western Australia regarding an application for a company to be wound up under s 459P of the Corporations Act or, alternatively, on just and equitable grounds.

What happened?

Will a Court order security for costs against a liquidator with litigation funding? Not always, as a recent decision of the NSW Supreme Court made clear.

Background

The defendant was the director of a company (Commercial Indemnity Pty Ltd or ‘Commercial Indemnity’) which provided agency services for commercial and industrial rental and petroleum bonds.

This week’s TGIF considers a recent Federal Court decision which validated dispositions of property made by a company after the winding up began.

WHAT HAPPENED?

On 8 May 2017, Bond J ordered that a coal exploration company (the Company) be wound up on just and equitable grounds following a shareholder oppression claim. So as to avoid the consequences of a liquidation, his Honour immediately stayed that order for a period of 7 days to enable the warring parties a final chance to resolve their differences.

This week’s TGIF considers Swiss Re International v Simpson [2018] NSWSC 233, where the court found that three former executives of Forge Group had not engaged in misleading or deceptive conduct when trying to address a cash flow crisis.

What Happened?

In February 2014, Forge Group Limited collapsed. Up to that point, it was a publicly listed engineering, procurement and construction company operating across mining and other sectors

This week’s TGIF considers the decision in the matter of Bias Boating Pty Ltd [2017] NSWSC 1524 which deals with leave to join already named defendants to a “mothership” proceeding after expiration of the limitation period

Background

The first plaintiff was appointed administrator of the second plaintiff (the relevant company) on 25 August 2014 and became its liquidator on 29 September 2014.

This week’s TGIF examines a recent decision of the Supreme Court of New South Wales which considered whether payments made by a third party to a company’s creditors could be recovered as unfair preferences.

What happened?

On 2 September 2015, liquidators were appointed to a building and construction company (the Company) and later commenced proceedings against eight defendants for the recovery of payments considered to be unfair preferences.

This week’s TGIF considers the application of the principle in Re Universal Distributing and whether liquidators may claim an equitable lien to recover their costs and expenses, even if no assets are realised and no fund exists.

Background

In the recent Court of Appeal decision of Primary Securities Ltd v Willmott Forests Limited, liquidators had been appointed to an insolvent company which was the responsible entity of a managed investment forestry scheme.

This week’s TGIF considers the case of Brandon Industries (Vic) Pty Ltd v Locker Pty Ltd [2016] VSC 373 where the Court dismissed an application to set aside a statutory demand due to the applicant’s failure to establish a genuine dispute or offsetting claim pursuant to section 459H of the Corporations Act 2001 (Cth).

BACKGROUND

In January 2014 I published an article titled “Directors Duties – Insolvent Trading: Five rules to deal with a company in financial difficulty” in which I called upon the Federal government to reform Australia’s harsh insolvent trading laws and bring in some protections against ipso facto clauses in order to facilitate the restructuring of businesses.

BACKGROUND

Administrators were appointed to a company and as a result, the company entered into a Deed of Company Arrangement (DOCA). 

After the DOCA had been entered into, a secured creditor who had abstained from voting on the decision of whether the company should enter into the DOCA, purported to appoint an administrator under its security. 

The deed administrators sought a declaration from the Court that the second administration should be terminated (amongst other things). 

DECISION