Today the Queensland Supreme Court held that an insolvent company’s environmental obligations under State law were unaffected by the liquidators’ disclaimer of related property and resource tenures. This decision changes the previous understanding of liquidators’ powers and the order of priority in which claims will be paid in a liquidation, and may have broader implications for insolvent companies that are subject to obligations under State laws.
Today the Queensland Supreme Court confirmed that the liquidators of an insolvent company are ‘executive officers’ of that company under Queensland’s environmental laws, which means that the liquidators are required to use available funds to cause the company to comply with its environmental obligations under an environmental protection order issued to Linc.
Liquidators, administrators and receivers in Queensland are on notice that they may face serious personal consequences if they fail to cause companies to which they are appointed to comply with Environmental Protection Orders (EPOs).
Re Linc Energy Limited (In Liquidation) [2017] QSC 53 (13 April 2017) has determined that liquidators may not be able to escape obligations under an EPO by issuing a disclaimer notice.
The Supreme Court of Queensland has delivered a significant judgement concerning the obligations of liquidators to cause an insolvent company to incur the costs of complying with State environmental laws, in priority to other unsecured creditors.
On instructions from the liquidators of Linc (Stephen Longley, Grant Sparks and Martin Ford of PPB Advisory) JWS made an application for directions in respect of both the liquidators’ and Linc’s environmental obligations in Queensland.
The statutory demand process is widely used by companies wishing to secure prompt payment of debts owing by companies registered in Australia. This article will look at a company's options for dealing with a statutory demand.
What is a statutory demand?
There are a number of reasons why liquidators might want to slow things down when it comes to commencing or prosecuting proceedings. A liquidator might want more time to fully investigate certain claims or secure appropriate funding before incurring substantial costs or adverse costs exposure. While there are options available to liquidators looking to delay either the commencement or service of a particular proceeding, each comes with its own risks.
This week’s TGIF considers a recent Federal Court decision in which relief was sought under section 588FM of the Corporations Act to ensure a security interest perfected after the ‘critical time’ did not automatically vest.
What happened?
On 7 April 2016, administrators were appointed to OneSteel. OneSteel, a member of the Arrium Group of Companies, subsequently entered into a deed of company arrangement.
The government has released draft legislation reforming insolvency laws to create a ‘safe harbour’ defence for directors faced with an insolvent trading claim, together with a statutory stay on the enforcement of ipso facto clauses when a party to a contract enters a formal administration process. This is good news for company directors and delivers on industry calls for law reform.
Background
This week’s TGIF considers the case of In the matter ofCNL Transport Pty Ltd (in liq) [2017] NSWSC 291, where the New South Wales Supreme Court terminated a liquidation where the company was solvent and its debts had been paid.
Background
A company was wound up by the Court on 27 February 2017 following its failure to comply with a creditor’s statutory demand. The statutory demand had been issued by an insurer in respect of unpaid workers’ compensation insurance premiums.
This case provides some useful guidance on some key aspects of oppression claims, and also illustrates that courts will be reluctant to wind up solvent companies, even where the parties are in deadlock and oppression has been established, in this case preferring to make buy out orders at a price to be determined.