The decision in York, in the matter of Exactech, Inc [2024] FCA 1522 reaffirms the scope to recognise a US chapter 11 bankruptcy in Australia as a foreign main proceeding [1] and demonstrates the importance of interim stay orders in protecting the assets of debtors and the interests of creditors until the final determination of the recognition application.
Despites its recent failure in case against an administrator in a phoenixing case, ASIC could snatch long-term victory from the jaws of defeat with clear regulatory guidance for insolvency practitioners.
On 14 September 2023, the Australian Securities and Investments Commission (ASIC) released Consultation Paper 372 "Guidance on insolvent trading safe harbour provisions: Update to RG 217".
With the mass of reports, reviews and consultations that have already occurred, there is no lack of critiques, complaints and proposed solutions. The risk is that these will (once again) be cherrypicked for fixes, rather than form the basis for a comprehensive review.
It has been 33 years since the "recession we had to have" in 1991. Fears that Australia would enter a technical recession during 2023 didn’t eventuate.
Welcome to the 2024 edition of "From Red to Black", our annual review of significant developments and topical issues in the Australian restructuring and insolvency market.
Regulator intervention and government stimulus packages in response to market shocks often mask underlying systemic distress and disrupt economic cycles. With companies now largely weaned off COVID-19 support packages, insolvencies have significantly increased.
By following certain steps and focusing on relevant courses of action, directors of startups can leverage the Safe Harbour provisions to increase their chances of navigating financial difficulties and achieving a better outcome for their company.
The Alita matter serves as a good illustration that if you intend to seek leave under section 444GA(1)(b) you should act swiftly and with regard to the potential regulatory risk.
Insolvency practitioners and other potentially affected stakeholders, such as company directors and corporate trustees, should watch this space carefully to keep abreast of any changes to their obligations.
The Commonwealth Parliamentary Joint Committee on Corporations and Financial Services Corporate insolvency in Australia was released on 12 July 2023.
The Report states that the construction industry is experiencing one of the highest rates of insolvencies compared to other sectors. The Report cited ASIC data which shows that the number of companies entering external administration has increased relative to the same month in the previous two financial years, with the construction industry being the most highly represented.
In a recent decision, Anchorage Capital Master Offshore Ltd v Sparkes [2023] NSWCA 88, lenders to the Arrium Group, a company that collapsed, have lost their appeal regarding the personal liability of the Chief Financial Officer and Group Treasurer. The NSW Supreme Court had previously dismissed the lenders' claims, and the Court of Appeal has now affirmed that decision.