Successful outcomes for clients seeking to obtain winding up orders against foreign companies with local agents. The case summaries below, of Re Anagram International LLC (recs and mgrs apptd) [2025] VSC 267 and the earlier matter of W Capital Advisors Pty Ltd (in its capacity as trustee for the W Capital Advisors Fund) v Mawson Infrastructure Group, Inc (NSD1395/2024), provide guidance on how parties can best position themselves for success in these circumstances.

Relevant Law

What is insolvency?

Insolvency is defined in section 95A of the Corporations Act 2001 (Cth)(Act) as the inability of a company to pay its debts when they fall due. Australian law applies a cash-flow test rather than a balance-sheet test, meaning the inquiry does not turn on the numerical gap between assets and liabilities.

Creditors’ statutory demands are a very powerful, and commonly used weapon by creditors.  They are cheap and easy to issue, and the consequences for not dealing with one appropriately can be extremely serious – i.e. liquidation.

Because of this, the courts enforce strict compliance with the requirements imposed on a party seeking to rely on one, so creditors should ensure they are up to date on those requirements.

For corporate groups considering an internal reorganisation, a restructure effected via section 413 of the Corporations Act 2001 (Cth) (Corporations Act) under a scheme of arrangement (Corporate Restructure Scheme) provides a flexible alternative to more orthodox approaches commonly adopted. As is well known, the Corporations Act enables a corporation to enter into a scheme of arrangement with its creditors or members (or any class of them). Schemes of arrangement are commonly used to implement agreed mergers, as an alternative to the comparatively rigid mechanism of a takeover bid.

According to ASIC insolvency data, there were 2,975 building companies that entered external administration in 2023-24, representing some 27% of all insolvencies.

The collapse of Porter Davis on 31 March 2023, left some 1,700 homeowners across Queensland and Victoria having to deal with the fallout.

These are extremely sobering figures. The reality for homeowners is that they are often left dealing with liquidators without many options and faced with substantial losses.

What can you do if you suspect your builder is facing financial difficulty?

The Federal Court of Australia recently handed down a landmark judgment against a third party adviser for devising an asset-stripping scheme and breaching the creditor-defeating disposition provisions of the Corporations Act 2001 (Cth).

Chris Pearce, Blackwall Legal LLP

This is an extract from the 2025 edition of GRR's The Asia-Pacific Restructuring Review. The whole publication is available here.

This is an Insight article, written by a selected partner as part of GRR's co-published content. Read more on Insight

In summary

The Supreme Court of NSW refused to validate the appointment of a voluntary administrator (Administrator) to Premier Energy Resources Pty Ltd (Company) under section 447A of the Corporations Act 2001 (Cth) (Act) after the Administrator failed to investigate allegations of fraud surrounding his appointment.

Introduction