The liquidators of a company successfully applied to join the insurers of the directors of an insolvent company to court proceedings.
In Issue
As part of a claim against a company’s directors for insolvent trading, it became apparent that should the directors be found liable, they would be unable to pay the damages sought, and would become bankrupt. The liquidator brought an interlocutory application to join the company’s insurers that provided management liability cover in the relevant period, pursuant to of s117 of the Bankruptcy Act 1966 (Cth).
This week’s TGIF considers In the matter of Spitfire Corporation Limited (in liquidation) and Aspirio Pty Ltd (in liquidation) [2022] NSWSC 579 in which liquidators sought an order that a non-party creditor pay their legal costs for seeking directions from the Court.
Key Takeaways
The law is the witness and external deposit of our moral life. Its history is the history of the moral development of the race.
In a recent decision, Judge David Novak of the US District Court for the Eastern District of Virginia vacated the Chapter 11 plan confirmation order entered by the bankruptcy court in the Mahwah Bergen Retail Group (formerly known as Ascena Retail Group) case, holding that the plan’s non-consensual third-party releases were unenforceable.1 The ruling arrived shortly after an
WHAT WE’VE BEEN UP TO
The team have been busy dealing with a wide range of instructions over the past few months.
Some of our recent highlights include:
In brief: The Supreme Court of Queensland has ordered that an objector to an external administrator's remuneration application pay the administrator's costs of responding to the objections. This decision, which will be welcomed by external administrators, appears to be the first time such an order has been made in the insolvency jurisdiction.
Disclaimer of interest: Colin Biggers & Paisley acted for the Provisional Liqudiator in Michaela Manicaros v Commercial Images (Aust) Pty Ltd [2022] QSC 83.
This is reality:
- Small businesses reorganize, all the time, under Subchapter V;
- Farmers reorganize, all the time, under Chapter 12; and
- Large businesses reorganize, all the time, under regular Chapter 11.
That’s because all of those three types of debtors have bankruptcy reorganization processes designed specifically for them.
Middle Market Debtors
Restructuring & Insolvency analysis: For the first time in this jurisdiction, the court has ordered the winding up of a listed plc on the just and equitable ground under section 122(1)(g) of the Insolvency Act 1986 (IA 1986) for loss of substratum. In a reserved judgment handed down on 17 March 2022 (following a two-week trial in February 2022), the High Court has clarified and modernised English law in line with more recent Australian authorities.
The issue
A "no action" clause will appear in almost all English law-governed bond trust deeds.
A no action clause provides that a bondholder (or anyone entitled to payments on the bonds) cannot, initially, proceed directly against the issuer. Instead, the right to bring a cause of action resides with the trustee and it is only if the trustee, having become bound to take action, fails to do so within a reasonable time (with the failure continuing) that a bondholder can then itself proceed directly against the issuer.
Introduction