Key Points:

For a company to be entitled to subrogation under section 560, it must ensure that it meets the strict requirements of section 560 and does not pay entitlements directly to the relevant company's employees.

In New Age Constructions (NSW) Pty Ltd v Etlis, in the matter of Etlis[2013] FCA 884, an unsecured creditor applied to set aside a Personal Insolvency Agreement (PIA)and also sought a sequestration order against the debtor’s estate.  The Federal Court considered whether the terms of the PIA were unreasonable or not calculated to benefit creditors generally.

In Lehman Brothers Australia Limited, in the matter of Lehman Brothers Australia Limited (in liquidation) (No 2) [2013] FCA 965, the Federal Court again confirmed that schemes of arrangement are a viable restructuring tool to compromise claims involving a class of creditors and third parties.

BACKGROUND

You are a judgment creditor with a charge over the judgment debtor’s assets and have lodged a caveat over a property owned by judgment debtor. You finally receive word from the judgment debtor that the property has been sold and you are asked to provide a withdrawal of caveat. You agree, subject to being paid the judgment debt at settlement in exchange for the withdrawal. Your request is followed by silence, and then a lapsing notice is served upon you. Your caveat will lapse unless you go to the expense of Supreme Court proceedings to extend the life of your caveat.

In the decision of Allied Express Transport Pty Ltd v Exalt Group Pty Ltd (Administrator Appointed) (No 2) [2013] FCA 477, Exalt Group Pty Ltd (Exalt) sought an adjournment of a winding up application under s440A(2) of the Corporations Act on the basis that the creditors had voted by a majority in favour of a resolution that Exalt enter into a DOCA.

On August 27, 2013, in a case of first impression, the Third Circuit rejected an attack on a foreign liquidator’s petition for recognition of an Australian insolvency proceeding under Chapter 15 of the US Bankruptcy Code premised on the argument that the foreign proceeding violated US public policy.

Recently the Full Federal Court, in the decision ofCBA Corporate Services (NSW) Pty Limited v Walker and Moloney, in the matter of ZYX Learning Centres Limited (receivers and managers appointed) (in liq) [2013] FCAFC 74, confirmed a number of important principles for Liquidators to consider when making an application to wind up a company in insolvency under section 459A of the Corporations Act 2001 (Cth) (the Act).

The recent decision of Ackers (as joint foreign representative) v Saad Investments Company Limited; In the matter of Saad Investments Company Limited (in official liquidation) [2013] FCA 738 held that the UNCITRAL Model Law on Cross Border Insolvency did not prevent the Court from making provision for pari passu payment of local tax debts and penalties from a debtor’s local assets before remitting them to the debtor’s centre of main interests (being “the place the debtor conducts the administration of his interests on a regular basis and is, therefore, ascertainable by third parties”).

The Federal Court of Australia case of Yu v STX Pan Ocean Co Ltd (South Korea), in the matter of STX Pan Ocean Co Ltd (receivers appointed in South Korea) [2013] FCA 680 addressed the issue of whether a ship can be arrested in Australia where the owner is subject to insolvency proceedings in another country.

Facts

The recent Federal Court of Australia (the Federal Court) decision of Ackers v Saad Investments Company Limited [2013] FCA 738 considered whether the Australian Commissioner of Taxation (the Commissioner) could collect part of an AUD $83,271,545.70 debt owed by Saad Investments Company Limited (in official liquidation) (Saad) from Saad’s Australian assets, before those assets were remitted to the Cayman Islands for distribution in Saad’s ‘foreign main proceeding’.

Facts