The Parliamentary Joint Committee on Corporations and Financial Services (the Committee) has commenced an inquiry into the “effectiveness of Australia’s corporate insolvency laws in protecting and maximising value for the benefit of all interested parties and the economy”.[1]
In a recent case involving a former financial services provider in liquidation, thousands of pending claims from former customers and a letter of comfort with a looming expiry date, the Liquidators appointed to wind up Forex Capital Trading Pty Limited successfully applied to the Federal Court of Australia for orders permitting them to conduct an expedited process for the adjudication and admission of claims.
Background
Faced with thousands of complex potential claims from creditors, and a soon-to-expire letter of comfort, the liquidators of Forex Capital Trading Pty Ltd (in liq) sought creative and efficient relief in the Federal Court of Australia to implement an expedited adjudication process to adjudicate and admit these claims without creditors having to individually establish causation for their loss or damage: Woodhouse (liquidator), in the matter of Forex Capital Trading Pty Ltd (in liq) [2022] FCA 600.
In the recent case of Stubbings v Jams 2 Pty Ltd [2022] HCA 6, the High Court has allowed an appeal relating to asset-based lending (ABL) and the enforceability of security associated with these loans. The High Court held that whilst asset-based lending itself is not unconscionable, certain conduct may render loans and security unenforceable. The decision is a reminder that lenders should ensure the circumstances of potential borrowers are fully scrutinised prior to lending.
The Parliamentary Joint Committee on Corporations and Financial Services (the Committee) has commenced an inquiry into the “effectiveness of Australia’s corporate insolvency laws in protecting and maximising value for the benefit of all interested parties and the economy”.[1]
Faced with thousands of complex potential claims from creditors, and a soon-to-expire letter of comfort, the liquidators of Forex Capital Trading Pty Ltd (in liq) sought creative and efficient relief in the Federal Court of Australia to implement an expedited adjudication process to adjudicate and admit these claims without creditors having to individually establish causation for their loss or damage: Woodhouse (liquidator), in the matter of Forex Capital Trading Pty Ltd (in liq) [2022] FCA 600.