The Australian Government is proposing to constrain certain "ipso facto" clauses ‒ a move which could make flip clauses void. The closing date for submissions is Friday 27 May 2016.
How would changes to ipso facto clauses affect securitisation?
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Although they should always keep time-frames very much in mind, the decision in BKA Practice Co Pty Ltd gives liquidators greater scope to find all possible time-frames in which they have to work.
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In some circumstances a plaintiff/claimant can bypass a defendant (even an insolvent one) and seek a declaration against the defendant's insurer.
The High Court has confirmed that, if a defendant is insolvent, the plaintiff may seek a declaration that the defendant's insurer is liable to indemnify the defendant, at least when:
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Companies that have leasing as a small and irregular part of their overall business still must comply with the PPSA if their interests in leased goods are to be protected.
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A Senate Economics References Committee has recommended that the Commonwealth enact uniform national security of payment legislation, albeit with a target of around 2018 for implementation.
Security of payment (SOP) reform discussion papers were released by the Queensland and New South Wales Governments in the run up to Christmas. That timing happened to coincide with the publication by the Senate Economics References Committee of its report "'I just want to be paid': Insolvency in the Australian Construction Industry".
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Complex cross-border issues can be dealt with relatively easily under the Cross-Border Insolvency Act as long as flexibility is built into the relevant orders.
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You can lead a director to the safe harbour, but you can't make him drink.
The Government's new approach to insolvency is long on rhetoric about risk taking and the need to remove the stigma of business failure.
However, it is short on detailed consideration of exactly why we have legal rules for corporate and personal insolvency.
Those rules aim to balance the interests of creditors against the need to encourage business start-ups.
The Australian Government has accepted certain recommendations of the Productivity Commission's long-awaited Report on Business Set-up, Transfer and Closure, in an attempt to change the focus of Australia's insolvency laws from "penalising and stigmatising business failure”, according to the Minister for Small Business and Assistant Treasurer, the Hon Kelly O'Dwyer MP.
It has expressed a willingness to legislate to introduce at least two main changes:
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It's unclear that safe harbours by themselves will provide genuine opportunities for restructuring distressed businesses.
The Productivity Commission's upcoming report on corporate insolvency will address two burning issues: ipso facto clauses and how to encourage directors to save financially-stressed companies.
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A section 439A report must contain all material information which is known or reasonably ascertainable by administrators.