Faced with thousands of complex potential claims from creditors, and a soon-to-expire letter of comfort, the liquidators of Forex Capital Trading Pty Ltd (in liq) sought creative and efficient relief in the Federal Court of Australia to implement an expedited adjudication process to adjudicate and admit these claims without creditors having to individually establish causation for their loss or damage: Woodhouse (liquidator), in the matter of Forex Capital Trading Pty Ltd (in liq) [2022] FCA 600.

The liquidators of a company successfully applied to join the insurers of the directors of an insolvent company to court proceedings.

In Issue

As part of a claim against a company’s directors for insolvent trading, it became apparent that should the directors be found liable, they would be unable to pay the damages sought, and would become bankrupt. The liquidator brought an interlocutory application to join the company’s insurers that provided management liability cover in the relevant period, pursuant to of s117 of the Bankruptcy Act 1966 (Cth).

This week’s TGIF considers In the matter of Spitfire Corporation Limited (in liquidation) and Aspirio Pty Ltd (in liquidation) [2022] NSWSC 579 in which liquidators sought an order that a non-party creditor pay their legal costs for seeking directions from the Court.

Key Takeaways

The law is the witness and external deposit of our moral life. Its history is the history of the moral development of the race.

Stoneway was advised in its CBCA proceedings by a team including: Kevin Zych, Michael S. Shakra and Joshua Foster (Restructuring & Insolvency); Richard Swan (Litigation); Kristopher Hanc (Capital Markets); Thomas Bauer and Philip Ward (Tax); and Preet K. Gill (Complex Legal Issues and Opinions).

Introduction

Summary

On 30 March 2022 the High Court sanctioned a restructuring plan for Smile Telecoms Holding Limited in which the court for the first time allowed the exclusion of all but one class of creditors from voting on a restructuring plan. The sanction hearing considered several salient issues around challenges made to a plan by a creditor or shareholder, questions of jurisdiction and the concept of a "compromise or arrangement" in Part 26A of the Companies Act 2006 ("CA 2006").

Background

German gaming group Löwen Play obtained sanction for a scheme of arrangement following a hearing in the High Court on 5 May 2022. Mr Justice Johnson granted an order sanctioning the scheme following its approval by a significant majority of creditors at the single scheme meeting. The group operates a gaming arcade business in Germany and the Netherlands, and the relevant scheme company was incorporated in Germany.

Property claims, especially lien claims, are common in the current environment of supply chain disruption and delay. Most contractual, statutory and common law lien claims, including where the Personal Property Securities Act 2009 (Cth) is involved, will turn on timing, scope and quantum arguments. In this article, we outline the usual levers in a lien dispute from the debtor and creditor perspectives and make some suggestions for getting to a commercial resolution.

HERBERT SMITH FREEHILLS

Pension Disputes Bulletin

Welcome to the latest edition of our regular pension disputes bulletin. In these bulletins we report on key cases, Ombudsman decisions and regulatory activity and we highlight emerging risks for pension schemes, providers, sponsors, administrators and other service providers.

In a hurry? In a hurry? Read the `Risk warning', `Takeaways' and `Comment' boxes to find out the key risks, points to note and to read our observations on each case/ development.

MAY 2022

Restructuring & Insolvency analysis: For the first time in this jurisdiction, the court has ordered the winding up of a listed plc on the just and equitable ground under section 122(1)(g) of the Insolvency Act 1986 (IA 1986) for loss of substratum. In a reserved judgment handed down on 17 March 2022 (following a two-week trial in February 2022), the High Court has clarified and modernised English law in line with more recent Australian authorities.