On 13 October 2010 ASIC released the National Insolvent Trading Program (NITP) Report, which sets out key messages, promoting greater director responsibility by encouraging directors to remain properly and fully informed about a company’s financial affairs, and to be aware of the implications of insolvent trading; and to seek (timely) professional advice from accountants, lawyers and insolvency practitioners.
After consulting over 1500 companies displaying solvency concerns, ASIC has identified several possible insolvency indicators including:
Insolvency Partner, Amanda Banton and Lawyer, Anna MacFarlane summarise the High Court’s judgment delivered on 14 April 2010 in which the Court held, as the Full Court of the Federal Court held in first instance, that, properly construed, Pt 5.3A of the Corporations Act (Cth) 2001 does not permit third-party releases within DOCAs.
The important features of the judgment:
As foreshadowed earlier this year, on 2 June 2010 the Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen MP introduced the Corporations Amendment (Sons of Gwalia) Bill 2010. Associate, Justin Le Blond summarises the Bill.
The proposed amendments in the Bill will return the order of claims in a corporate winding-up to the situation that was commonly understood to exist prior to the Sons of Gwalia judgment. That is, priority will be given to creditors ahead of shareholders in granting access to the equity of an insolvent company.
This is the second of a series of articles that will examine the impact of the Personal Property Securities Act 2009 on specific business sectors. In this article Corporate Lawyer, Llon Riley deals with the impact of the PPSA on leasing or hiring equipment.
The High Court of Australia is expected soon to hand down its judgment in Lehman Brothers v City of Swan. It is likely that this judgment will definitively determine whether Deeds of Company Arrangement under Pt 5.3A of the Corporations Act (“the Act”) are able to force creditors to give releases to third parties.
The significant increase in the number of companies passing into liquidation in the current economic climate has focussed Courts on whether they can summons a non-resident. Dispute Resolution Associate, Justin Le Blond, examines the position.
The High Court’s recent decision in Bofinger v Kingsway involves the law respecting sureties, their obligation to indemnify the creditor and right to indemnity by the principal debtor, and the operation of the doctrine of equity associated with the term “subrogation”.
The High Court of Australia’s Sons of Gwalia Ltd v Margaretic (Sons of Gwalia) decision recognised an aggrieved shareholder’s claim for damages (in relation to the acquisition of shares) on equal footing with those of an insolvent company’s other unsecured creditors. Dispute Resolution Associate, Justin Le Blond, examines the Government’s response to the decision.