The liquidators of a company successfully applied to join the insurers of the directors of an insolvent company to court proceedings.
In Issue
As part of a claim against a company’s directors for insolvent trading, it became apparent that should the directors be found liable, they would be unable to pay the damages sought, and would become bankrupt. The liquidator brought an interlocutory application to join the company’s insurers that provided management liability cover in the relevant period, pursuant to of s117 of the Bankruptcy Act 1966 (Cth).
Personal bankruptcy can significantly impact a family law matter and it is important that parties are aware of the potential consequences. By way of general summary only:
What are the implications of bankruptcy?
If you or your former spouse / former de facto partner become bankrupt:
In Issue
Whether the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW) (Act) could be invoked to join the insurers of an insolvent company to a representative proceeding.
The Background
Whether an insured had misrepresented and/or failed to disclose to an insurer that its professional services encompassed directors and officers services.
In Issue
- Non-Disclosure and misrepresentations by insureds
- Consideration of sections 21 and 26 of the Insurance Contracts Act 1984 (Cth)
The Background
With the number of companies entering external administration on the rise and the crucial post-Christmas retail trading period nearing an end, it is important for owners to ensure that they fully understand what rights they have to terminate a lease and recover unpaid rent if a tenant goes into external administration and its creditors then vote to enter into a Deed of Company Arrangement (DOCA).
If a tenant is in arrears and a DOCA is in place, can an owner exercise its contractual right to terminate the lease?
Since the Global Financial Crisis it has been increasingly common for parties involved in property settlement disputes to be fighting over property with a net negative value or, in extreme cases, for one party to be declared bankrupt.
Despite common perception, a spouse being declared bankrupt in the middle of court proceedings for property settlement does not automatically end the proceedings or mean that the bankrupt’s assets are put out of reach of the other spouse in a property settlement.
The High Court has recently confirmed in Willmott Growers Group Inc v Willmott Forests Limited (Receivers and Managers Appointed) (In Liquidation) that a liquidator of a landlord company has power to disclaim a lease, thereby terminating the landlord’s liabilities and the tenant’s rights under the lease.
Following such a disclaimer, the tenant would then be left to prove its loss as an unsecured creditor in the winding up of the landlord company.