In Sea Management Singapore Pte Ltd v Professional Service Brokers Ltd, SEA, a 50% shareholder in PSB, applied to put PSB into liquidation due to the irreconcilable deadlock SEA claimed existed at both board and shareholder levels over the direction of Conexa, a PSB subsidiary.  Associate Judge Bell dismissed the application, holding that it was not just and equitable to order liquidation when a reasonable option existed in the constitution, or under the shareholders' agreement.

Just what is an account receivable has been the subject of much debate, because it determines what assets are used to satisfy preferential claims, i.e. who gets paid first in a receivership or liquidation.  In 2008, the High Court judgment in Commissioner of Inland Revenue v Northshore Taverns (in liq) confined “accounts receivable” to “book debts”.  Although since criticised, that judgment was the only judicial authority on the point.

The Court of Appeal has affirmed the High Court’s ruling that a voluntary administrator may only use a casting vote where the number of creditors voting for and against the resolution is equal. 

The second limb of the test, that the 50% represent at least 75% in value, cannot be the subject of the casting vote.  Nor can the casting vote be used to choose between the number and the value.

InThe Commissioner of Inland Revenue v Blackmore Trust Ltd, Blackmore tried to stave off liquidation for the sum of $1.4 million owed to the IRD.  After six or seven adjournments, Blackmore finally put evidence before the Court (albeit through its lawyer, rather than by affidavit) claiming that its liabilities totalled $15.6 million, and its sole asset, the James Smith building in the Wellington CBD, was valued at $21.5 million as a going concern, or $11 million - $13 million in a "fire sale".

Managh v Morrison and Ors involved an application by a liquidator to set aside a transaction pursuant to section 292 of the Companies Act 1993.  Approximately one year before liquidation the company assigned causes of action against a firm of solicitors and a real estate agent to a trust associated with the company's director.

Burns & Agnew v Commissioner of the Inland Revenue and Strategic Finance Limited (in rec) concerned a dispute between a secured creditor and the IRD (as a preferential creditor) in respect of certain funds received by the liquidators of Takapuna Procurement Limited (TPL).  The liquidators applied to the High Court for directions as to the application of those funds and this required the Court to undertake an analysis of the concept of an "account receivable" for the purposes of determining whether such funds could be applied to satisfy preferential claims under the Seventh

Resource consents and environmental risks can affect the value of an insolvent company's assets, and can give rise to civil or criminal liability.

This Brief Counsel examines:

• when resource consents require transfer to a new owner, and
• potential liabilities that insolvency practitioners may face.

Types of consents

Five types of consent are available under the Resource Management Act 1991 (RMA):

In Jordan and Vance v First City (in liquidation ) & Gore Street (in liquidation), the liquidators of Gore Street applied for a pooling order that the liquidation of the two defendants, First City and Gore Street, proceed as if they were one company.

The recent case of Re Armitage, ex parte Established Investments Limited (in liquidation) considered an objection by the Official Assignee to Mr Armitage's automatic discharge from bankruptcy. 

The Ministry of Economic Development has released a discussion document (together with a Q & A) which considers a range of potential changes to the fees and levies that fund the institutions that regulate New Zealand's corporate environment and financial markets.