This week’s TGIF considers a recent decision of the Federal Court of Australia in Re Aviation 3030 Pty Ltd (in liq) [2021] FCA 1244 on section 477(2B) of the Corporations Act 2001 (Cth) (Corporations Act) and approval of a liquidator’s proposal to enter into a settlement agreement with obligations that extend beyond three months.
Key Takeaways
On 10 October, the Dubai Court of First Instance issued a potentially ground-breaking judgment in respect of directors’ liability in the context of corporate insolvency.
In particular, in the matter of the liquidation of the public company Marka PJSC (“Marka”), the Court held the company’s board of directors and managers personally and jointly liable for the company’s outstanding debts, totalling close to AED 450 million.
Where a shareholder has redeemed his shareholding following a failed investment without objection some months prior to the initiation of a voluntary liquidation, the Court will not permit him to use the statutory deferral provisions relating to voluntary liquidations for an abusive or improper purpose. This includes using such proceedings as leverage to exert undue pressure in proposed claims against the company or directors.
This week’s TGIF looks at In the matter of Gary John Anderson in his capacity as liquidator of G & G Contractors Pty Ltd (In Liquidation) [2021] FCA 1185, the latest of a line of Federal Court decisions confirming the approach to be taken by liquidators of trustee companies that have ceased to be trustees as a result of going into liquidation.
Key Takeaways
The use of a company name which is the same or similar to the name of an insolvent company is fraught with complications.
Were you at any stage involved in a company which went into liquidation or administration? Are you now involved in another business with the same or a similar name? If so, you could inadvertently have fallen foul of the criminal and civil liability under Section 216 of the Insolvency Act 1986. Joseph Miller explains the pitfalls of this complicated and often overlooked area of insolvency law.
The Reserve Bank of India (“RBI”) has, in its capacity as the regulator of non-banking financial companies and under the powers conferred to it pursuant to Section 45-IE (1) of the Reserve Bank of India Act, 1934 (“RBI Act”), superseded the Board of Directors of SIFL and SEFL.
The press release of even date from the RBI also stipulates the following:
1) The step has been taken owing to governance concerns and defaults by SIFL and SEFL in meeting their various payment obligations.
Creditors can often confuse (i) the outlawed practice of “phoenixing” with (ii) pre-pack administrations. The former is an abuse of the privilege of limited liability through (often repeatedly) liquidating a company laden with debts only to emerge shortly after under the guise of a new limited company, debt free, effectively carrying on the exact same business with the same name, premises and people.
The Court of Appeal has overturned a decision of the High Court on whether immunity from suit, generally afforded to participants in court proceedings, extends to an examinee during an examination conducted under section 236 of the Insolvency Act 1986 ("Section 236").
A hotly anticipated decision in the ongoing saga of the Babcock & Brown liquidation was handed down last week, resulting in another win for the liquidator (represented by Johnson Winter & Slattery) and further highlighting the challenges facing liquidators when they are thrust into a quasi-judicial function when assessing proofs of debt.
The Bottom Line: