The recent Victorian Supreme Court case of Grapecorp Management Pty Ltd (in liq) v Grape Exchange Management Euston Pty Ltd provided an interesting analysis of when set-off, pursuant to section 553C(1) of the Corporations Act 2001, may be claimed.
When can a set-off be claimed against debts owed to an insolvent company?
Under section 596B of the Corporations Act 2001 (Cth) (Act), liquidators and other eligible applicants can apply to the Court for orders to examine certain persons in connection with the affairs of a corporation. Under section 596C, the affidavit in support is not available for inspection unless a court otherwise orders.
In the case of Sutherland v Pascoe; Re Matrix Group Ltd(as trustee for the Matrix Group Unit Trust (in liq)) [2012] FCA 453, the Federal Court granted examinees access and discussed the applicable principles.
The recent Victorian Supreme Court decision of Grapecorp Management Pty Ltd (in liq) v Grape Exchange Management Euston Pty Ltd [2012] VSC 112 clarifies the application of set-off provisions for insolvent companies.
BACKGROUND
Grape Exchange Management Euston Pty Ltd (Grape Exchange) provided various services in relation to vines and grapes, pursuant to a Management Agreement with Grapecorp Management Pty Ltd (in liq) (Grapecorp).
Grape Exchange claimed that it had a right of set-off under section 553C of the Corporations Act.
On 21 December 2011, the New South Wales Court of Appeal (Court) delivered its decision in Moss v Eaglestone (2011) 257 FLR 96. This decision clarifies the circumstances in which legal causes of action will be considered property divisible amongst a bankrupt’s creditors.
Background
In 2007, Moss supplied information regarding Schapelle Corby to Nationwide News Pty Ltd (News). News published this information in a newspaper article, which also referred to Moss’s criminal background.
In our March 2012 Insurance Update we considered the potential widening of the scope for creditors to claim damages against a director personally for contravention of the Corporations Act 2001 (Act). The Supreme Court of Queensland awarded Phoenix Constructions over $1.2 million in damages against Mr McCracken for contravention of s 182 of the Act. This decision, a first of its kind, was appealed by Mr McCracken.
On 5 October 2011 Justice Barrett of the Supreme Court of NSW handed down a decision in Centro Retail Limited and Centro MCS Manager Limited in its capacity as Responsible Entity of the Centro Retail Trust [2011] NSWSC 1175 (“Centro”) where he found that the responsible entity of Centro Retail Trust would be justified in modifying the constitution of the trust without unitholder approval to a insert a provision permitting the issue of units at a price different to that provided for by the pre-existing provisions.
Introduction
Another failed property developer has just been made bankrupt in Australia, this time with a difference – he was already bankrupt in New Zealand. Bank of Western Australia (Bank) v David Stewart Henderson (No. 3) [2011] FMCA 840 is another Australian cross-border insolvency case in which we have successfully tested the boundaries of the Cross-Border Insolvency Act 2008 (Cth) (the CBIA), this time with the Bankruptcy Act 1966 (Cth).
Facts
The Bridgecorp Group collapsed and receivers were appointed on 2 July 2007. The companies comprising the group were subsequently also placed in liquidation. The First and Second Defendants in the case were two of the Bridgecorp Group (Receivers and Managers appointed) (in Liquidation).
The directors faced numerous civil and criminal charges for alleged Wrongful Acts including alleged false statements in prospectuses, extension certificates and investment statements issued to prospective investors.
Background: the Timbercorp Group
The statutory exemption can be refreshed each time a person signs a new contract, even if he/she continues to hold the same position.
Receivers of a failed company have been unable to convince the Federal Court that statutory restrictions on termination payments reduced the payout entitlement of a senior executive (White v Norman; In the Matter of Forest Enterprises Australia Limited (Receivers and Managers Appointed) (in Administration) [2012] FCA 33).
Background