JWS successfully protected the rights of the class action creditors to have their claims in the voluntary administration of SurfStitch Group Limited (SGL) valued appropriately, for the purposes of voting at the second meeting of creditors of SGL. Joseph Scarcella of JWS acts for Nakali Pty Limited (Nakali), the lead plaintiff in the first class action proceeding instituted against SGL.
Two NSW Court of Appeal decisions in two months have upheld orders made against directors of a corporate tenant to pay $3,537,040.50 in one case, and $602,178.35 in the other, as damages for the landlord’s loss of rent and make good expenses, as a result of failed retail tenancies.
The decisions are:
The Victorian Court of Appeal delivered judgment in Re Amerind today and held that the priority regime in the Corporations Act applies to insolvent corporate trustees.
In an important decision for insolvency practitioners, the Victorian Court of Appeal today delivered judgment in Commonwealth of Australia v Byrnes and Hewitt in their capacity as joint and several receivers and managers of Amerind Pty Ltd (Receivers and Managers Appointed) (in liq) & Ors [2018] VSCA 41.
Since the decision of the Supreme Court of New South Wales in Re Independent [2016] NSWSC 106, there has been doubt about whether receivers and liquidators should apply the statutory priorities afforded to employee entitlements in sections 433, 561 and 556 of the Corporations Act 2001 (Cth) (Act) when distributing the assets of companies who have conducted their businesses as trusts.
Introduction – why does this matter?
The Victorian Court of Appeal has handed down it’s decision on appeal from Re Amerind (receivers and managers apptd)(in liq) [2017] VSC 127; (2017) 320 FLR 118. The appeal judgment is now up on Austlii and can be read here: Commonwealth of Australia v Byrnes and Hewitt as receivers and managers of Amerind Pty Ltd (receivers and managers apptd)(in liq) [2018] VSCA 41.
In good news for liquidators, the Federal Court’s decision in Marsden (liquidator) v CVS Lane PV Pty Limited Re: Pentridge Village (in which Dentons acted for the liquidator) confirms that time will be extended for liquidators who are unable to bring voidable transaction proceedings within the relevant timeframe due to a lack of funding.
The case also has wider implications. It could be relied upon by liquidators to justify subsequent claims which could otherwise have been brought at an earlier stage if funding had been available.
As deleveraging to control transactions continue to be part of the legal landscape in Australia, we anticipate seeing further examples, particularly where the distressed company is a listed entity.
The Bendigo and Adelaide Bank is progressing with loan recoveries against investors in Great Southern Plantations with an outstanding loan.
It has a head start in loan recoveries against the members of the class action (the Group Members) because in the settlement deed approved by Justice Croft on 11 December 2014 it states that each of the Group Members “acknowledges and admits their liability to the BEN Parties to pay the Loan Balance under their Loan Deed”.
A recent decision of the Full Court of the Federal Court has considered whether certain types of third party payments to a creditor fall outside the preference provisions.