Introduction
Early in his or her appointment a liquidator in a creditors' voluntary liquidation (CVL) should consider applying to the Court to convert the CVL to a Court ordered winding up in insolvency. Conversion may benefit the unsecured creditors, in whose interests the liquidator acts, by enabling the liquidator to pursue claims and make recoveries not available in a CVL.
The reasons liquidators have applied for conversion include:
In brief - Your actions will depend on whether you acknowledge or dispute the debt
If you are contacted by a debt collector, you should be frank about what you plan to do. If you dispute the debt, you should get legal advice as quickly as possible.
Debt collectors don't go away if you ignore them
The High Court has ruled that liquidators of lessors can disclaim leases, thus terminating the leasehold interests of tenants.
However, yesterday's High Court decision in Willmott Growers Group Inc. v Willmott Forests Limited (Receivers and Managers Appointed) (In Liquidation) [2013] HCA 51 leaves open another issue: do liquidators need to get Court approval before exercising this power, and, if so, how easy or difficult would it be to get that approval?
Key Points
Key Points
The High Court in Willmott Growers Group1 has upheld a Victorian Court of Appeal decision that a lease can be disclaimed by the liquidator of a landlord. The decision will have very significant implications for tenants including:
A Deed of Company Arrangement (DOCA) is essentially the equivalent of a PIA for a corporation. However, a company must be in administration for a DOCA to be proposed.
In brief - High Court confirms that liquidators of landlord companies can disclaim leases, terminating lessees' rights
In Willmott Growers Group Inc v Willmott Forests Limited (Receivers and Managers Appointed) (In Liquidation) [2013] HCA 51, the High Court has confirmed that a liquidator of a landlord company has the power to disclaim a lease. The effect of the disclaimer is to terminate the leasehold interest of the lessee.
FACTS
A recent Federal Court of Australia decision has granted the Australian Commissioner of Taxation the right to recover, from a failed foreign company’s Australian assets, the pari passu amount the Commissioner would have been entitled to receive (on account of outstanding domestic tax and penalties) if he had been allowed to prove in the liquidation before the assets are remitted to the company’s foreign representatives (the liquidators).
The Australian Corporations Act 2001 provides that a company in liquidation that holds insurance for the benefit of third parties must pay the proceeds of the insurance policy to those third parties in priority to other creditors. Insurance proceeds payable to third parties under this provision are subject to deductions of "any expenses of or incidental to getting in" those proceeds. The liquidator of Brighton Hall Securities Pty Ltd sought directions from the court regarding the liquidator's entitlement to deduct his fees and expenses from the insurance proceeds.
The High Court of Australia recently decided that when a landlord goes into liquidation, the liquidator may be able to disclaim a lease granted by the landlord.
For a tenant there can be very serious and very expensive consequences if a lease it has taken is disclaimed by its landlord’s liquidator.
A tenant may, however be able to take some steps to protect itself and avoid the expensive and significant consequences of a disclaimer of a lease by the landlord’s liquidator.
What does disclaim mean?