In the recent decision, In the matter of Mirabela Nickel Ltd (subject to deed of company arrangement) [2014] NSWSC 836, the NSW Supreme Court has granted leave to the deed administrators under section 444GA of the Corporations Act 2001 (Cth) (Act) to transfer 98.2% of the existing shares of Mirabela Nickel Ltd (Mirabela) to unsecured creditors without the consent of its shareholders.

FACTS

Key Points:

This case presented a difficult and unique set of circumstances for the court to navigate while the scheme clock was ticking.

The recent approval of the David Jones scheme of arrangement demonstrates how, in the absence of shareholder opposition, the inexorability of a scheme timetable can cause problems for a court when there is a major development after the first court hearing.

Summary

Key points

First occasion where a deed administrator has sought leave under section 444GA of the Corporations Act 2001 (Cth) (theAct) in respect of a publicly listed company. The Court granted leave for 98.2% of each shareholders’ holding in Mirabela Nickel Limited (Mirabela) to be transferred to certain unsecured creditors as part of a broader recapitalisation, under a deed of company arrangement (DOCA), without shareholder approval.  

Independent experts have become increasingly nervous on independence and process points since the Australian Securities and Investments Commission (ASIC) required a replacement independent expert in Billabong, apparently based on independence concerns raised by ASIC in that case.

Approximately 11 years ago, largely as a result of public resentment of bonuses being paid to directors of insolvent companies, the Corporations Act was amended by the Corporations Amendment (Re-Payment of Director’s Bonuses) Act 2003. The amendment made it possible for liquidators to not only seek to recover director bonuses but to also recover any “unreasonable director-related transactions” pursuant to the newly added section 588FDA of the Corporations Act.

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Introduction

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.

Partner, Michael Lhuede and Senior Associate, Ben Hartley discuss the recent Federal Court decision of AMWU v Beynon that dealt with directors’ personal liability for the payment of employee entitlements.

Introduction

Insolvency practitioners need to be aware of the potential for incurring personal liability under civil penalty provisions for contraventions of the Fair Work Act and how they can protect themselves from claims when accepting appointments.

On November 23, 2018, the German Federal Council (Bundesrat) approved the Tax Reform Act of 2018 (the “Tax Reform Act”; Gesetz zur Vermeidung von Umsatzsteuerausfällen beim Handel mit Waren im Internet und zur Änderung weiterer steuerlicher Vorschriften), which was passed by the German Parliament (Bundestag) on November 8, 2018.