In Re John Pettit Pty Limited (Subject to a Deed of Company Arrangement) [2014] NSWSC 728, the Supreme Court of NSW considered an application by the deed administrators of John Pettit Pty Ltd (John Pettit) seeking directions to sell property potentially owned by third parties and orders which limited the Deed Administrators’ personal liability in relation to the sale.

BACKGROUND

The Court refused to declare an appointment of administrators invalid under section 447C of the Corporations Act 2001 (Cth) on the basis of a previous purportedly invalid removal of a director and alleged insufficient grounds to establish that the company was, or was likely to become insolvent.  This case illustrates the Court’s willingness to overlook technical anomalies in exercising its discretion under section 447C where the end result for the company would be the same, and a broad approach in assessing whether there are reasonable grounds to form a view that a company

A Supreme Court of New South Wales decision in February 2014 is a timely reminder to creditors to ensure that agreements clearly articulate arrangements where funds are to be held on trust for a specific purpose.  The Court revisited the question of the entitlement to retention funds and competing creditor claims in the matter of National Buildplan Group Pty Ltd (subject to deed of company arrangement)(Buildplan)

In DSG Holdings Australia Pty Ltd v Helenic Pty Ltd [2014] NSWCA 96, the Court of Appeal considered the meaning of the “interests of the creditors as a whole” under section 600A of the Corporations Actand the circumstances in which the Court will intervene to set aside or impose conditions on resolutions passed at creditors meetings.

BACKGROUND

In the decision of JPMorgan Chase Bank, National Association v Fletcher; Grant Samuel Corporate Finance Pty Limited v Fletcher [2014] NSWCA 31, the Court of Appeal of New South Wales confirmed that liquidators may apply under rule 36.16(2)(b) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) to further extend the time within which they may bring voidable transactions proceedings.  We considered the first instance judgment in a

In the decision of In the matter of AWA Limited (Administrators Appointed) (Receivers and Managers Appointed) ACN 111 674 661 [2014] NSWSC 249, the New South Wales Supreme Court considered the scope of s 477D of the Corporations Act 2001 (Cth) and whether it was appropriate to make a direction regarding the administrators’ entry into a loan agreement to pay out a secured creditor.

Background

In the recent matter of JP Morgan Chase Bank, National Association v Fletcher; Grant Samuel Corporate Finance Pty Ltd v Fletcher [2014] NSWCA 31, the NSW Court of Appeal handed down a decision with important consequences for liquidators and the time they have to commence proceedings for voidable transactions. The decision also illustrates the frequently inconsistent operation of the Corporations Act 2001 (Cth) and Court procedure rules. Senior Associate, Elisabeth Pickthall and Associate, Stefano Calabretta discuss the decision.

In brief - Court sets aside DOCA in Helenic v Retail Adventures

The NSW Supreme Court has recently set aside a deed of company arrangement (DOCA) on the basis that it was prejudicial to creditors who voted against it. The court appointed liquidators to the company.

Declaration of interest: CBP Lawyers acted for the plaintiffs in the case discussed in this article and also represent a large number of unsecured creditors of Retail Adventures Pty Ltd (Administrators Appointed).

When a company is placed into liquidation, the company’s available funds are paid to general unsecured creditors on a pro rata basis by way of a dividend payment.  However, certain classes of creditors are given priority in the payment of dividends, including employees who are owed wages and other employment entitlements by the company.

What is the position if a person advances money to a company, after it has been placed into external administration, to allow the company to pay wages or other entitlements to employees?

Summary 

In this eBulletin we discuss a recent Supreme Court of NSW decision: In the matter ofGreat Wall Resources Pty Limited (In Liq) [2013] NSWSC 354. This decision provides useful insight into the scope of unreasonable director-related transactions.