There are often difficult issues encountered when the worlds of bankruptcy and probate collide. This case is a good example.
The case concerns section 283A of the Insolvency Act 1986 ("s283A") which provides that a bankruptcy trustee must deal with a bankrupt's interest in their home within three years, otherwise the property re-vests in the bankrupt on expiry of this period. It is commonly known at the "use it or lose it" provision.
A mortgage loan repurchase facility (more casually referred to as a "repo") is a financing structure commonly utilized to finance mortgage loans. These facilities are utilized by both residential and commercial mortgage loan originators and aggregators to finance mortgage loans that they originate or acquire. The structure is favored by liquidity providers in the mortgage loan finance arena due to its preferential "safe harbor" treatment under the United States Bankruptcy Code (the "Bankruptcy Code"), as further described below.
If you are a creditor who is owed money by a company that has gone into voluntary administration, you will receive reports and notifications of meetings from the voluntary administrators. Chamberlains can advise you on your rights and what to do in this situation. In this case update, we look at one issue that may come up in such a scenario – when more time is needed before the second meeting.
On March 14, 2023, Judge Ashely M. Chan of the U.S.
“The trustee may avoid . . . any obligation . . . incurred by the debtor, that was madeor incurred“ with actual fraudulent intent or as constructive fraud.
–From § 548 of Bankruptcy Code (emphasis added).
Similar language is contained in the Uniform Voidable Transactions Act—and in its predecessor acts—for 100+ years. [Fn. 1]
But actions to avoid debts as fraudulent transfers are rare—and largely unknown, it seems.
A Bad Experience
This quarterly civil fraud update provides a summary of reported decisions handed down in the courts of England and Wales in the period of January - March 2023.
BRIBERY
In this week’s TGIF, we consider the Federal Court’s recent decision inFotios (Bankrupt) v Helios Corporation Pty Ltd (No 3) [2023] FCA 251, and earlier decisions in the same proceedings, clarifying the current Australian position as to priorities between creditors of successive trustees.
Key takeaways
High Court's Landmark Decisions Clarify the Position for Creditors and Liquidators in Insolvency Proceedings
The Law Amending the Enforcement and Bankruptcy Law and Certain Laws ("Amendment Law"), known as the 7th Judicial Package, was published in the Official Gazette (32154) dated 05 April 2023 and entered into force except for several provisions with later effective dates.
The Amendment Law sets out several changes in the fields of enforcement law, criminal law, and procedural law, and it expands the scope of mandatory mediation significantly. Some of the prominent amendments introduced by the Amendment Law are examined below:
Originally published in the March 2023 issue of the Australian Restructuring & Turnaround Association Journal (ARITA), this article explores the interaction of statutory set‑off and unfair preference claims through its legislative origins, historical application and consideration by the courts, before discussing the High Court’s recent judgment and concluding with key takeaways for insolve