This week’s TGIF considers the latest chapter in the story of Legend International Holdings Inc, where the Court of Appeal considered whether Legend was insolvent, whether mining tenements held by Legend’s subsidiary constituted ‘readily realisable assets’, and whether various deeds entered into by Legend were void as uncommercial transactions.

The equitable doctrine of marshalling can protect the security interests of subordinate secured creditors when a debtor becomes insolvent.

Marshalling is a neglected tool in the insolvency toolbox, but it can play an important role in protecting the security interests of subordinate secured creditors.

Recent amendments brought about by the National Health Amendment (Pharmaceutical Benefits) Bill 2019 (Cth) allow for the supply of pharmaceutical benefits by approved pharmacies under the Pharmaceutical Benefits Scheme (PBS) to continue following external administration or bankruptcy (section 91B, National Health Act 1953 (Cth) (Act)).

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?

This week’s TGIF considers a recent application by a liquidator to the NSW Supreme Court for directions regarding the sale of trust property where the trust deed could not be found.

Background

This week’s TGIF considers a recent Federal Court decision where the Court found a company’s general purpose liquidators had not acted unreasonably in opposing an application that special purpose liquidators also be appointed.

Background

In Carrello,^[1] the Federal Court granted a warrant under section 530C of the Corporations Act 2001 (Cth) (the Act) allowing the liquidator of Drilling Australia Pty Ltd (the Company) to search and seize property, books and records located in storage containers belonging to the Company.

In Short

The Situation: Should liquidators be removed under section 90-15 of the Insolvency Practice Schedule (Corporations) in circumstances where they engaged in preappointment discussions with a secured creditor, allegedly failed to investigate the company's affairs promptly, and retained the company's preappointment solicitors?

This week’s TGIF considers the decision in ACN 093 117 232 Pty Ltd (In Liq) v Intelara Engineering Consultants Pty Ltd (In Liq) [2019] FCA 1489, where the Court determined that a transaction described as a ‘legal phoenix’ by the advising practitioner was, in fact, an uncommercial transaction and an unreasonable director related transaction.

What happened?

Upon being appointed, insolvency practitioners are often faced with existing litigation involving the company or person they have been appointed to.

There are a multitude of factors that the practitioner needs to consider in relation to existing litigation. This article sets out some key considerations for administrators, liquidators, receivers and trustees in bankruptcy, as well as the practical steps a practitioner should follow. Although the article refers to practitioners appointed to companies, the principles are also generally applicable for Bankruptcy Trustees.