^{"Whenever there is change, and whenever there is uncertainty, there is opportunity."Mark Cuban, American businessman and investor}

In the current global market, very few things are clear other than that volatility and change are ever-present.

Payment of priority creditors under section 561 of the Corporations Act 2001 (Cth) is an activity conventionally performed by liquidators, albeit the section is silent as to the holder of the relevant payment obligation. The Federal Court of Australia has recently confirmed that distributions to priority (employee) creditors are not the exclusive purview of liquidators (where receivers are appointed contemporaneously); receivers may exercise the powers contained in section 561 to distribute certain funds to such priority creditors.

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:

Creditors' rights to information and records

In O’Keeffe Heneghan Pty Ltd (in liquidation); Aus Life Pty Ltd (in liquidation); Rocky Neill Construction Pty Ltd (in liquidation) trading as KNF Group (a firm) (No 2) [2018] NSWSC 1958, the NSW Supreme Court strongly reminded us of the superior priority that an authorised deposit-taking institute’s unregistered security interest (perfected by control) has over the interests of secured creditors perfected under the personal property securities regime. The proceedings involved three companies in liquidation (together known as KNF Group).

The Government has now announced its intention to proceed with the introduction of a bill to establish a farm debt mediation scheme, based in many respects on comparable New South Wales legislation. It is important for secured lenders to farming enterprises to consider in advance the implications of the bill and the necessary changes to product design, documentation, client relationship management and enforcement processes which may be required.

The scheme is intended to provide for fair, equitable and timely resolution of farm debt issues with two key objectives:

Introduction

We recently acted for the Commonwealth (Represented by the Australian Government Department of Jobs and Small Business) in Re Stay in Bed Milk and Bread Pty Ltd  [2019] VSC 181, in which the Supreme Court of Victoria determined that a franchisor’s marketing fund was not subject to a trust (express or Quistclose) in favour of franchisees and therefore was available for distribution to the franchisor’s priority creditors, including the Commonwealth.

2006 was a boom year for Great Southern Plantations: it raised $1.141 billion from selling cattle droves, olive groves and woodlots to 25,800 investors in its Managed Investment Schemes (MIS) (source: Australian Agribusiness reports).

Mrs Govindasamy was one of these investors. She purchased 10 droves in the 2006 Beef Cattle MIS (cost: $50,000), 7 Grovelots in the 2006 Organic Olives MIS (cost: $56,000) and 33 Woodlots in the 2006 Plantations MIS (cost: $99,000).

This hot-topic comes as a timely reminder as we approach January 2019 – a milestone date for the Personal Property Securities (PPS) Act, as it has now been seven years since the PPS Register went “live”.

Every business that made seven year registrations will now see them start to expire from 30 January 2019 onwards. Businesses that selected seven year registrations early on when the PPS Register was introduced must take note as their registrations approach expiry. There can be grave consequences for lapsed registrations.

30 January 2019 marks the seventh anniversary of when the Personal Property Securities Act 2009 (Cth) started to apply and, as registrations against serial numbers and/or consumer property can only have a duration of 7 years, that means those types of registrations (if made in 2012) will expire automatically this year unless they are renewed.

If you have made registrations on the PPS register that are for a period of 7 years (or less):