Gothard v Fell; in the matter of Allco Financial Group Ltd (receivers and managers appointed) (in liq) (2012) 88 ACSR 328
On 15 May 2012, Jacobson J of the Federal Court of Australia allowed an application by Receivers to be released from confidentiality undertakings so that use could be made of Australian Securities and Investments Commission (ASIC) examination transcripts.
In the recent Court of Appeal decision of Re Willmott Forests Ltd [2012] VSC 29, the Court held that a lessee’s leasehold interest can be extinguished by a liquidator appointed to a lessor company using the disclaimer power in s 568 of the Corporations Act 2001 (Act).
Facts
In Grapecorp Management Pty Ltd (in liq) v Grape Exchange Management Euston Pty Ltd [2012] VSC 112, Grape Exchange Management Euston Pty Ltd (Grape Exchange) managed a vineyard for Grapecorp Management Pty Ltd (Grapecorp).
Receivers and employees are the greatest losers from a recent chain of court cases. Unless overturned on appeal or by legislation, the cases impose financial burdens on employees and administrative burdens on receivers.
At stake are employees' accrued leave entitlements and the statutory requirement to pay them once a company enters external administration. Employees of companies in receivership can lose entitlements they would ordinarily receive during liquidation depending entirely on the time at which a company enters administration or liquidation.
In light of the modern trend towards “pre-pack” arrangements as a legitimate restructuring solution, a recent judgment handed down in the Federal Court provides a timely reminder for insolvency practitioners that independence is paramount and liquidators can be removed upon the application of a creditor in circumstances where there is a perception of conflict.
While the winding up of a company is a last resort in the context of shareholder oppression, the discretion to order a winding up will be exercised by the Courts if the circumstances dictate that it is the most appropriate remedy, such as where it will provide finality and certainty for the shareholders without undermining the value of the company’s projects to a potential purchaser on winding up.
Background
A recent Federal Court of Australia decision in the administration of the Hastie Group Limited (Hastie Group)1 illustrates a number of important points for administrators, secured parties and purchasers under the new regime established under the Personal Property Securities Act 2009 (Cth) (PPSA). If you would like to discuss the implications of this case with any of our PPSA or insolvency litigation experts, please do not hesitate to contact us.
The facts
The Western Australian Court of Appeal has today delivered its judgment in the appeal of Westpac Banking Corporation v The Bell Group Ltd (in Liq) [2012] WASCA 157 ( The Bell Appeal ). The Court substantially rejected the appeal. The decision has important implications for directors, financiers and bondholder investors. It is a salutary reminder for financiers of the consequences of "knowingly receiving" a benefit from a breach of directors' duties.
Background
Whether you are a John Donne, Ernest Hemingway or Metallica fan, the above clause rings a bell. Last week the Court of Appeal for Western Australia joined those “Riding the Lighting” and provided its own musings on “For Whom the Bells Tolls” down under. Rather than affirming that the bell tolls for the infamous Spanish guerrilla fighters or a tortured metaphysical poet, the Australian court provided a new answer: The Bell [decision] tolls for “would be” secured lenders.
After 448 days in court, over 85,000 documents and more than 10 judgments, a special bench of the Western Australian Court of Appeal handed down its decision in Westpac Banking Corporation v The Bell Group Ltd (in liq) (No.3) [2012] WASCA 157 (Bell Appeal Decision). The Bell Appeal Decision raises issues relating to the integrity of transactions with companies facing insolvency, which may create serious liability issues for company directors and lenders alike.