In Grant v Independent Livestock 2010 Limited [2012] NZHC 3458, the liquidators of ILA sought to hold the sole director of ILA and IL2010 (a company to which ILA's assets had been transferred) liable for debts incurred by ILA.

In Hutchins v Edwards [2013] NZHC 336, the High Court declined an application for an adjournment by a debtor who sought further time to liquidate property in order to pay a judgment debt.

Further to our November update, the Securities Markets (Unsolicited Offers) Regulations 2012 have now come into force, on 1 December 2012. The Regulations set out specific rules applying to unsolicited offers (also known as "predatory" or "low-ball" offers) including new processes, detailed disclosure requirements, and the right to cancel acceptances of unsolicited offers.

Big changes are proposed to the use of trusts as trading enterprises by the Law Commission as part of its ongoing review into trust law.

Recommendations include:

The decision of Grant v CP Asset Management Ltd & Ors outlined the appropriate methodology to be used when examining whether a resolution passed at a creditors' meeting should be set aside as prejudicial to a creditor or class of creditors under section 245A of the Companies Act 1993.

In our March 2012 update we reported on a claim under section 294 of the Companies Act 1993 by the liquidators of Five Star Finance Limited (in liquidation) (FSF) against a trustee of a trading trust (Bowden No. 14 Trust (Trust)) to set aside payments amounting to $928,937.79.

Armitage v Established Investments Limited (in liq) involved an appeal by an undischarged bankrupt (A), against a High Court decision imposing conditions that A was not to engage in business for three years following discharge at the end of his bankruptcy. The High Court had also ordered that the period of bankruptcy was to be extended for three years beyond the statutory three year period, although A did not challenge this aspect of the High Court decision.

The Court of Appeal has reversed the High Court’s decision in Healy Holmberg Trading Partnership v Grant on a PPSA issue it describes as being of “practical significance”. 

If a liquidator is found guilty of stealing money from a company in liquidation, most creditors would assume that he or she could never be a liquidator again. Not in New Zealand. A recent case highlights the need for urgent reform of the regulation of insolvency practitioners.

The lessons to be drawn from the Crafar receivership in relation to the Personal Properties Securities Act (PPSA) have now been distilled by the Court of Appeal, which has largely confirmed the High Court’s reasoning.

We discuss the implications of the litigation.