JWS successfully protected the rights of the class action creditors to have their claims in the voluntary administration of SurfStitch Group Limited (SGL) valued appropriately, for the purposes of voting at the second meeting of creditors of SGL. Joseph Scarcella of JWS acts for Nakali Pty Limited (Nakali), the lead plaintiff in the first class action proceeding instituted against SGL.
This article was first published by INSOL International in December 2017.
The Year Brick & Mortar Got a Bankruptcy Makeover
What Fashion and Luxury Goods Companies Need to Know About Restructuring and Bankruptcy
Los Angeles / New York / San Francisco / Washington, DC
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Introduction
Understanding the Issues, Causes, Tools for Distressed Retail Situations & What Lies Ahead for 2018
On 11 September 2017, the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill 2017 was passed by the Senate. The Bill features two key changes to the Corporations Act:
In certain circumstances, liquidators may be at risk of personal exposure to costs orders in litigation.
The court’s approach to the making of costs orders against liquidators depends on (amongst other things) whether the liquidator is a named party to the proceedings, whether the liquidator is commencing or defending proceedings, and whether the liquidator has acted ‘improperly’ or unreasonably in the commencement, maintenance or defence of the action.
Proceedings commenced by the liquidator / company in liquidation
If you've ever traded with a company that subsequently enters liquidation, you'll know that it can be very frustrating and disruptive to your business. If the company owes you money and you're an unsecured creditor, you'll join the (often long) line of other unsecured creditors and may see little or no money at the end of the process.
Just because a liquidator asserts you have received an unfair preference, does not necessarily mean you have or that there are no potential defences available to you.
Significant reforms to Australia’s insolvency law introducing a “safe harbour” for directors who suspect their company may become or be insolvent have now commenced.
The Corporations Act imposes a duty on company directors to prevent a company from trading whilst insolvent. A director of a company can be personally liable for any debts incurred by a company trading whilst insolvent and might also have civil or criminal penalties imposed against them.
This week’s TGIF considers Ziziphus Pty Ltd v Pluton Resources Ltd (Receivers and Managers Appointed) (in liq) [2017] WASCA 193, where the Court considered the impartiality and independence of liquidators.
BACKGROUND
The new section 588GA of the Corporations Act 2001 (Cth) (Act) provides a “safe harbour” from insolvent trading claims for directors who, when suspecting a company may be or is insolvent, start developing a course of action that is reasonably likely to lead to a better outcome for the company.