The single proceeding model, which is a core tenet in insolvency proceedings, was recently reaffirmed in the Companies’ Creditors Arrangement Act (“CCAA”) proceedings of Bloom Lake in Re Bloom Lake, 2021 QCCS 3402.

The abolition of the "peak indebtedness" rule will complicate liquidators' tasks, not least its adverse effect on pursuing preferences where it's unclear what forms the single transaction.

Our research shows rescue financing in Australia has been deployed as one element of a broader restructuring strategy, most commonly by an existing stakeholder, rather than as a profitable activity in itself.

As participants in the Australian debt restructuring market continue to innovate we expect to see an increase in these control transactions, testing further again the Australian statutory regimes.

This week’s TGIF considers a decision of the Supreme Court of New South Wales on whether leave should be granted for proceedings against a court-appointed liquidator personally.

Key Takeaways

In a recent decision, a district court reversed the decision of the bankruptcy court and clarified the independent obligation of the Bankruptcy Court to ensure that a Chapter 13 Plan satisfies the necessary requirements of the Bankruptcy Code, irrespective of the parties’ conduct.  In re: BRUCE D. PERRY, Debtor. KRISTA PREUSS, Standing Chapter 13 Tr., SDNY, Appellant, v. BRUCE D. PERRY, Appellee., No. 20-CV-4617 (CS), 2021 WL 4298192 (S.D.N.Y. Sept. 21, 2021)

The Section

On 29 September 2021, the English High Court rejected a challenge in respect of Caff Nero's company voluntary arrangement ("CVA"), brought by a landlord on the grounds of material irregularity and unfair prejudice. The single disgruntled landlord, with the backing of the EG Group ("EG") (who were interested in acquiring Caff Nero), argued that the directors of the company and the CVA nominees breached their respective duties in refusing to adjourn or postpone the electronic voting process to vote on the CVA, after EG had submitted an eleventh-hour offer for Caff Nero.

In brief

"All happy families are alike, each unhappy family is unhappy in its own way. With apologies to Tolstoy, the Akhmedov family is one of the unhappiest ever to have appeared in my courtroom." – Mrs. Justice Knowles

Voluntary administration is Australia’s primary business rescue regime. This article is Part 2 of a two-part series. In this article, we highlight the impact of voluntary administration on various stakeholders and the potential outcomes for a company in voluntary administration. It is not intended to be used as an exhaustive guide to Australia’s voluntary administration regime and its many nuances.