In the recent decision of MSI (Holdings) Pty Ltd v Mainstreet International Group Ltd [2013] QCA 27, the Court of Appeal considered the meaning and application of sections 471B and 471C of the Corporations Act.
BACKGROUND
The decision involved receivers who were appointed to MSI (Holdings) Pty Ltd (receivers appointed) (in liquidation) (MSI) by Central Coast Projects Pty Ltd (Central Coast) pursuant to a charge it held over all property, assets and rights of MSI.
Statutory demands are a quick and convenient way to prove a debtor company’s insolvency. But they’re sensitive creatures. There seems to be an endless list of potential defects to make the demand challenge-worthy.
Luckily for creditors, a recent decision of the WA Court of Appeal means there is one less way for a demand to fail.
The loan and the demand
Garuda Aviation is a small WA operator that borrowed $27 million from CBA to buy a plane. The loan was secured by a mortgage over the plane.
Introduction
On 29 January 2013, the Federal Court of Australia made orders approving the creditors’ scheme of arrangement between Nine Entertainment Group Pty Limited (NEG) and its senior and mezzanine lenders (Nine Scheme).
The Nine Scheme, made under Part 5.1 of the Corporations Act, follows Alinta and Centro as the third debt for equity restructuring of a major Australian company in as many years.
The recent collapses of major builders St Hilliers, Kell & Rigby and Reed Constructions have caused such concern that the New South Wales Government has launched a public enquiry into the issue.
Given the tough economic conditions, it is timely to review your corporate obligations and the risks involved in managing debts, consider how to protect your business if a contractor or principal encounters financial difficulty, and what you can do to minimise damage to your business.
Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings comes into effect on 26 June 2017 for insolvency proceedings that are opened on or after that date. The Recast Regulation replaces the EC Regulation (1346/2000) on insolvency proceedings and has direct effect in the UK until such time as the UK leaves the EU.
We are currently still in a lot of unknown territory; so how will our exit from the EU affect Debts here in the UK, in Europe and in other countries?
Once the UK finalises the exit from the EU, any debts someone may have in the EU will fall into the category of similar non-EU debts in other countries, such as the United States. Whilst you can include those debts in a UK bankruptcy you are only afforded the protection from them in the UK.
For the benefit of our clients and friends investing in European distressed opportunities, our European Network is sharing some current developments.
Recent Developments
On August 1, 2016, the Association for Financial Markets in Europe (AFME) published model clauses for the contractual recognition of bail-in for the purpose of satisfying the requirements of Article 55 of the EU Bank Recovery and Resolution Directive (BRRD).
This edition of Global Insight comes to you shortly after the United Kingdom voted to leave the European Union.
After controversial debates, Law no. 77/2016 on discharge of mortgage- backed debts through transfer of title over immovable property (the "Law on Debt Discharge") was finally published in the Official Gazette on 28 April 2016 and will enter into force on 13 May 2016.