This case highlights that the fiduciary duty to avoid conflicts of interest in particular will be strictly adhered to, with questions of fairness or unfairness of the relevant transaction being irrelevant. Directors are reminded of the need to take great care to manage potential risks when involved in transactions in which they are acting as director of more than one company. In particular, directors should check the rules in the companies’ constitutions around conflict of interest and if there is any concern, disclose their interest and seek approval of the companie
Key Points:
Courts will remove liquidators where there's apparent bias even where it might cause significant inconvenience and expense to the liquidation.
The Full Court of the Federal Court has found that a conflict of interest arose in circumstances where liquidators were required to investigate transactions with an entity that also refers work to the liquidators (ASIC v Franklin; Re Walton Construction Pty Ltd [2014] FCAFC 85).
The recent case of Australian Securities and Investment Commission v Glenn Franklin and Ors VID1359/2013 has raised some interesting issues in respect of disclosure and the acceptance of referrals. The proceeding was ultimately unsuccessful and ASIC were ordered to pay the Defendants' costs.
Background
The case centred around the collapse of a large construction company which operated along the east coast. Walton Construction Pty Ltd headed operations in Victoria and New South Wales and Walton Construction (QLD) Pty Ltd headed operations in Queensland.
This FYI outlines the things you need to know about the Insolvency Practitioners Bill in its latest form. You can follow this link to access the Bill on the New Zealand legislation website. The Bill is new legislation that seeks to improve the regulation of administrators, liquidators, and receivers. It proposes amendments to the Companies Act 1993 and the Receiverships Act 1993.
On June 30, 2016, the United States Senate passed the “Puerto Rico Oversight, Management and Economic Stability Act” (“PROMESA”) and it was quickly signed into law by President Obama.[1] PROMESA enables the Commonwealth of Puerto Rico and its public corporations and other instrumentalities in financial distress to restructure their debt.
In Susi v. Bourke, 2014 O.J. No. 11
A Summary
In Susi v. Bourke, [2014] OJ No 11, the Ontario Superior Court of Justice held that when all of the directors of a corporation fail to comply with their fiduciary duties, none of them can seek a remedy for oppression.
Recently, the superior court rendered a decision 1 which clarifies the extent of the discretion a court has when asked to ratify a hypothecary creditor’s recommendation to appoint an employee of its legal counsel to act as the officer of the court entrusted with the sale by judicial authority of the collateral secured in its favour.
CONTEXT
Introduction
The Supreme Court has issued its much-anticipated decision in Sun Indalex Finance, LLC v. United Steelworkers.
The Indalex decision, released by the Ontario Court of Appeal earlier this year, gave priority to pension plan members over other secured creditors that had advanced funds to keep Indalex from bankruptcy. This case came as a surprise to many practitioners and may have far-reaching implications for pension plan administrators and creditors alike.&nbs