Upon appointment, a liquidator will generally exercise control of as much of the company’s property as is available, so that it can be realised for the benefit of creditors.  However, in some cases, a liquidator may not wish to retain certain property if it is unlikely that such property will provide a return to the liquidation.

The recent Australian Federal Court case of Neeat Holdings (in liq) [2013] FCA 61 considered the issue of whether the liquidator of a trustee company should be permitted to sell trust assets notwithstanding the appointment of a new trustee in substitution for the insolvent trustee company.

The Facts

In this case the liquidators of Octaviar Administration had obtained an extension to the time for them to bring voidable transaction proceedings under section 588FF(1) of the Corporations Act (Extension Order). Before the expiration of the Extension Order, the liquidators sought a further extension under s588FF(3)(b) or, alternatively, asked the Court to vary the date in the Extension Order pursuant to the Court’s procedural powers under r 36.16 of Uniform Civil Procedure Rules 2005 (NSW) (UCPR).

The recent Supreme Court of New South Wales decision of AMC Commercial Cleaning (NSW) Pty Ltd v Stephen Keith Coade & Anor; Rockcliffs Solicitors & IP Lawyers v Schon Condon as liquidator of AMC Commercial Cleaning (NSW) (No 2) [2013] NSWSC 332 confirms that a liquidator may be personally liable to pay costs where the liquidator initiates proceedings to claim funds for the company in liquidation.

The recent New South Wales Supreme Court (Court) decision in In re MF Global Australia Ltd (in liq) No 2 [2012] NSWSC 1426 (23 November 2012) confirms that liquidators who properly incur costs and expenses in seeking court directions regarding the distribution of trust property and, in recovering such property, will generally be able to recover their relevant remuneration, costs and expenses from that trust property.

The recent decision of the Federal Court in Carter in the matter of Damilock Pty Ltd (Damilock) highlights the need for liquidators to review current practices when paying priority creditors (e.g. employee entitlements).

Facts

The plaintiffs were appointed as administrators of Damilock on 26 June 2007 and subsequently appointed as liquidators by creditors’ resolution at a meeting on 7 September 2007.

In brief - Employees made redundant by insolvency event entitled to generous payout

Changes to the General Employment Entitlements and Redundancy Scheme (GEERS) mean that employees are probably better off being made redundant by an insolvency event rather than as a result of a normal workplace restructure.

Act puts existing GEERS scheme into legislative form

Cases involving the application of the Council Regulation (EC) No. 1346 / 2000 (the ‘Regulation’) have been rare before the Maltese Courts since Malta joined the European Union in May 2004. Thus far, the only instance where an issue involving the interpretation of the Regulation arose involved a maritime case – The Foreign Economic Technical Co. Operative Company of China et vs m.v.

The European Court of Justice has held that a director of an English company can be liable for breach of German company law where insolvency proceedings are opened in Germany.

Key Point

The ECJ has outlined how the protection afforded to a counterparty by Article 13 of the European Insolvency regulation works where an insolvency officeholder challenges a transaction governed by a law different from the one which applies to the insolvency of the estate generally.

Facts