In this case, the High Court held that the proceeds of the sale of timber and land under a timber plantation scheme were not held on trust for investors by the scheme operators, with the result that they were available to secured creditors of the scheme in priority to the investors.  In particular, the High Court found that a trust will not arise without clear intention by the parties, and a court will not infer a trust simply because it thinks it is an appropriate means of protecting or creating an interest.  When establishing a managed investment scheme, parties shou

Background

In In the matter of Nexus Energy Ltd (subject to a deed of company arrangement) [2014] NSWSC 1910, the deed administrators of Nexus Energy Limited (subject to a Deed of Company Arrangement) (Nexus) sought leave of the Court to transfer all ordinary shares in Nexus to SGH Energy (No 2) Pty Ltd (SGH2). SGH2 was the proponent of the Deed of Company Arrangement (DOCA) and was also associated with the secured lender.

The final Report of the Whittaker Review into the Personal Property Securities Act 2009 (Cth) (PPSA) was tabled in Federal Parliament on 18 March, 2015.  The Report can be found here.  Our focus here is on key issues in the Report for the hire industry.  There are many, many other recommendations in the 542 page Report which we do not discuss here.

When a company is facing short term financial difficulties the directors or shareholders may decide to make a loan to the company to pay wages. 

The recent Supreme Court of NSW decision In the matter of Anglican Development Fund Diocese of Bathurst Board (recs and mgrs apptd) [2015] NSWSC 6, confirms that a board of directors’ residual powers in receivership include consenting to judgment in favour of a creditor.   

BACKGROUND

A recent Federal Court decision has confirmed that liquidators of a corporate trustee are entitled to be remunerated out of the trust assets for costs incurred in monitoring and investigating claims made against the trust.

Cash flow is crucial to the efficient running of a business. Mounting debt can significantly affect the operations of your company, result in increased interest costs and cause you to be unable to meet your own financial liabilities. If not addressed, debts can reach critical levels and will ultimately lead to insolvency.

To survive, strategies to prevent debts getting out of control must be embedded into your company’s DNA.

The statutory demand is one of the most frequently used (and misused) tools utilized by companies and other persons to obtain payment of debts owed to them by a company. Service of a statutory demand can be the first step towards placing insolvent companies into liquidation.

The consequences for a company that does not respond to the service of a statutory demand can be severe.

One of those consequences is that the company may find itself in the position where it is required to prove solvency before a court, in order to avoid a winding up.

In DSG Holdings Australia Pty Ltd v Helenic Pty Ltd [2014] NSWCA 96, the Court of Appeal considered the meaning of the “interests of the creditors as a whole” under section 600A of the Corporations Actand the circumstances in which the Court will intervene to set aside or impose conditions on resolutions passed at creditors meetings.

BACKGROUND

The Court found that the appointment of voluntary administrators to a company constituted oppressive conduct under section 232 of the Corporations Act 2001 (Cth) in circumstances where it was part of a clear strategy by the controlling shareholder to gain control of the company’s business, to the exclusion of the minority shareholders.  This case provides some useful observations on the operation of section 232, particularly around action by a parent company “of the affairs of” a subsidiary.