Morgan, in the matter of Brighton Hall Pty Ltd (in liq) [2013] FCA 970 considered whether a liquidator can claim remuneration in preference to third parties who would otherwise be given priority under s 562 of the CorporationsAct 2001 (Cth) (CA).

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 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”).

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).

Public comment on the exposure draft of the Insolvency Law Reform Bill 2013 has now closed. Sixteen submissions were received in response to the long awaited draft.

While one submission was confidential, the remaining 15 can be viewed here.

The recent decision of Lewis v Nortex Pty Limited (in liquidation)¹ highlights potential issues that may arise for liquidators when issuing a bankruptcy notice.

Facts

Nortex Pty Ltd (Nortex) was the trustee of the Nortex Unit Trust (Trust) pursuant to a deed. Under the terms of the trust deed, Nortex ceased to be trustee when the company went into liquidation. The beneficiaries of the trust were Kation Pty Ltd (Kation) which was controlled by the appellant (Lewis) and Lamru Pty Ltd (Lamru).

MSI (Holdings) Pty Ltd (Receivers Appointed) (in Liquidation) ACN 120 419 409 (MSI) against Mainstreet International Group Limited (Mainstreet) ACN 120 747 124.

The appeal was brought by the Receivers, who sought to recover a debt for the secured creditor once a liquidator had been appointed to MSI.

The Court of Appeal handed down the decision recently in favour of MSI.

Facts of the case

There is a plethora of Australian legislation which sheets home personal liability to directors and officers.

Below are some reminders of traps for directors and officers for transactions that might be undertaken in the usual course of a director or officer’s normal arrangements.

Trap 1: Super re-contribution

Some advisors propose, as a strategy for limiting superannuation death benefits tax, withdrawing superannuation balances and re-contributing that amount into super as a non-concessional tax-free contribution.

The decision of Austino Wentworthville Pty Ltd v Metroland Australia Limited & Ors [2013] NSWCA 59 was an appeal brought by Austino against Metroland and its voluntary administrator Mr Levi (“Levi”) to amend a proof of debt for the purpose of voting at a meeting of creditors in a voluntary administration.

The decision is relevant to insolvency practitioners who act as voluntary administrators in assessing voting entitlements in the voluntary administration process in addition to creditors who offer assets as security to obtain finance.

Background