Forum bias, along with some technical issues, are still challenges in cross-border insolvencies in Australia
Just over ten years ago, Lehman Brothers filed for bankruptcy in the US, which turned out to be one of the largest cross-border insolvency cases in history.
Last year also marks:
It is inevitable that companies will face periods of financial distress during their corporate lives. During these times, it is incumbent on the directors and management to seek to maximise the company's chances of survival and preserve value for stakeholders. Certainly it has not been uncommon for directors to use the threat of voluntary administration as a part of their stakeholder management strategy during these times.
Creditors' rights to information and records
This week’s TGIF considers a recent application for removal of liquidators where creditors argued that the liquidators had not properly discharged their duties and were not independent.
Background
On 19 June 2019, the much-anticipated High Court appeal in the matter of Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth [2019] HCA 20 (also known as the "Amerind appeal") was handed down.
In February 2019 the Federal Court delivered its decision in Lock, in the matter of Cedenco JV Australia Pty Ltd (in liq) (No 2).[1] The proceedings were commenced by the liquidators of three companies, SK Foods Australia Pty Ltd (in liquidation), Cedenco JV Australia Pty Ltd (in liquidation) and SS Farms Australia Pty Ltd (in liquidation).
This week’s TGIF considers the decision in Cremin, in the matter of Brimson Pty Ltd (In Liquidation) [2019] FCA 1023, which confirms that liquidators should approach the Court before taking steps to realise trust assets.
Background
How should the liquidator of an insolvent trustee company ensure payment out of trust assets of the entirety of his or her remuneration and expenses?
Who should read this eBrief:
- Company directors
- Accountants
- Financial Advisors
Proposed changes to Commonwealth legislation could have a significant impact on the potential for transferring assets out of one company into a new company to avoid paying liabilities.
If enacted, the changes will give liquidators, ASIC, and the ATO new powers to prosecute culpable directors and associated persons.
The appeal decision of the Full Federal Court in AIG Australia Limited v Kaboko Mining Limited confirmed that an insolvency exclusion was not triggered where a cause of action by a company against its former directors did not contain allegations of insolvency, notwithstanding that the directors’ actions arguably led to the company’s insolvency.
Background