In the matter of Premier Energy Resources Pty Ltd [2023] NSWSC 1185, the Administrator unsuccessfully sought an order validating his appointment where he failed to investigate allegations that his appointment documents included a director’s forged letter of resignation.
Key takeaways
In a case that unfolded on May 1, 2018, the Supreme Court of New South Wales ordered the winding up of Day & Night Online Transport Pty Ltd. This was ordered because of the company’s failure to comply with a statutory demand from a creditor, as outlined in section 459C(2)(a) of the Corporations Act 2001 (Cth). However, what followed was a legal journey that ultimately resulted in the rescission of the winding-up order, shedding light on critical aspects of corporate insolvency and the legal processes involved.
Background: The Winding-Up Order
Ligon 158 Pty Ltd v Shield Holdings Australia Pty Ltd [2024] FCA 144
A recent decision of the Federal Court of Australia has confirmed the Court’s power to make an order suspending limitation periods applicable to claims against a deregistered company when ordering its reinstatement under s 601AH of the Corporations Act 2001 (Cth) (the Act).
This week’s TGIF considers a recent decision of the Supreme Court of New South Wales (Forex Capital Trading Pty Ltd (in liquidation) v Invesus Group Limited [2024] NSWSC 867). Justice Ball determined that admission of a proof of debt by a liquidator was not akin to a judgment or settlement, and that such an admission did not create a new liability of the company.
In my December 2022 article, I predicted that when insolvencies started to surge in the Australian economy, the worst casualties would likely be in construction.1 It’s taken a while for my predicted post-COVID day of reckoning to arrive in Australia. But it is here.
With the mass of reports, reviews and consultations that have already occurred, there is no lack of critiques, complaints and proposed solutions. The risk is that these will (once again) be cherrypicked for fixes, rather than form the basis for a comprehensive review.
It has been 33 years since the "recession we had to have" in 1991. Fears that Australia would enter a technical recession during 2023 didn’t eventuate.
The Alita matter serves as a good illustration that if you intend to seek leave under section 444GA(1)(b) you should act swiftly and with regard to the potential regulatory risk.
A creditors' scheme of arrangement ("Scheme") can be a powerful restructuring tool implemented to achieve a variety of outcomes for a business, ranging from deleveraging or a debt-to-equity conversion to a merger and/or issue of new debt/equity instruments. When managed appropriately, a Scheme can reshape a business' debt and equity profile, setting it up for an improved go-forward operating platform. Below we set out an outline of the Scheme process in Australia and consider some key features that are unique to Australian schemes.
Section 90-15(1) of the Insolvency Practice Schedule (Corporations) (Cth) (IPSC) provides that the court may make such orders as it thinks fit in relation to the external administration of a company. It’s well recognised the broad power under that section extends to the making of judicial directions on the application of insolvency practitioners under section 90-20(1)(d) of the IPSC.
When to seek a judicial direction
Insolvency practitioners and other potentially affected stakeholders, such as company directors and corporate trustees, should watch this space carefully to keep abreast of any changes to their obligations.