Australian banks have historically relied on formal liquidation, voluntary administration and receivership processes available under the under the Corporations Act 2001 (Cth) and under general law where informal restructurings have failed. There has been little appetite for exploring alternative methods to exit distressed situations by debt trading.

On 1 December 2011 the Farm Debt Mediation Act 2011 (Vic) commenced operation. Under the Act, a farm debt mediation scheme is implemented which makes it compulsory for banks and other creditors to offer mediation to farmers before commencing debt recovery proceedings against the farmer on mortgages. Special Counsel, Jacqueline Browning discusses the scheme, which is about to mark its first anniversary of operation.

Key features

Some key features of the new Act (which in many ways mirrors similar legislation in NSW) are as follows:

On 17 October 2012, Nine Entertainment announced that it had reached an agreement with representatives of its senior and junior lenders with respect to a restructuring of its financing arrangements. Prior to the announcement, recent business press had been dominated by reports of Nine Entertainment's potential insolvency.

Key Points:

There are various issues of which a secured creditor must be aware in seeking to either comply with its obligations or take steps to enforce a mortgage under the Act.

Victoria's new Farm Debt Mediation Act 2011 (Vic) commenced operation on 1 December 2011 and is largely modelled on the equivalent New South Wales legislation, the Farm Debt Mediation Act 1994 (NSW).

After 448 days in court, over 85,000 documents and more than 10 judgments, a special bench of the Western Australian Court of Appeal handed down its decision in Westpac Banking Corporation v The Bell Group Ltd (in liq) (No.3) [2012] WASCA 157 (Bell Appeal Decision). The Bell Appeal Decision raises issues relating to the integrity of transactions with companies facing insolvency, which may create serious liability issues for company directors and lenders alike.  

The Western Australian Court of Appeal has today delivered its judgment in the appeal of Westpac Banking Corporation v The Bell Group Ltd (in Liq) [2012] WASCA 157 ( The Bell Appeal ).  The Court substantially rejected the appeal.  The decision has important implications for directors, financiers and bondholder investors. It is a salutary reminder for financiers of the consequences of "knowingly receiving" a benefit from a breach of directors' duties. 

Background

Whether you are a John Donne, Ernest Hemingway or Metallica fan, the above clause rings a bell. Last week the Court of Appeal for Western Australia joined those “Riding the Lighting” and provided its own musings on “For Whom the Bells Tolls” down under. Rather than affirming that the bell tolls for the infamous Spanish guerrilla fighters or a tortured metaphysical poet, the Australian court provided a new answer: The Bell [decision] tolls for “would be” secured lenders.

Key Points: The High Court held there was no variation in the terms of the Charge and therefore no registration was required.

On 1 September 2010 the High Court handed down its much anticipated decision in the appeal from the Queensland Court of Appeal in Re Octaviar Ltd (No 7) [2009] QCA 282, unanimously dismissing the appeal in Public Trustee of Queensland v Fortress Credit Corporation (Aus) 11 Pty Ltd [2010] HCA 29.

The fixed and floating charge

On 25 January 2010, the United States Bankruptcy Court handed down its much anticipated decision in relation to an action brought in that court by two Lehman Brothers entities (the Lehman entities) against BNY Corporate Trustee Services Limited (BNY) (the US Decision).

Financial Assistance (1)

[UPDATE] Which government support schemes are in place? 

The Federal Government has set up a fund of initially EUR 4 billion by establishing financing companies. With the third 3rd COVID-19 Act, which was passed in the National Council on 03 April, the Federal Government is increasing the fund's resources to up to EUR 28 billion.

An additional financial aid package of up to EUR 34 billion shall consist of