Recent declines in the trading prices of many companies' debt securities has created opportunities for those companies to reacquire a portion or all of that debt at substantial discounts through open market repurchases, privately negotiated transactions and tender offers. In some cases, the opportunities for discounted repurchases come to companies directly from investors seeking to sell the debt back in order to meet their own cash needs or otherwise obtain liquidity for thinly-traded securities.

On July 7th, the Wage Earner Protection Program (hereinafter the "WEPP") came into force, as instituted by the Wage Earner Protection Program Act[1].

The WEPP applies to workers whose employers have been declared bankrupt or were placed under receivership as of July 7, 2008.

Pursuant to an Order in Council dated July 4, 2008, July 7, 2008 was established as the date that certain of the provisions of S.C. 2005, c. 47 (the "Insolvency Reform Act 2005") and S.C. 2007, c. 36 (the "Insolvency Reform Act 2007") came into force. The Wage Earner Protection Program Act (the "WEPPA") as well as certain of the amendments to the Bankruptcy and Insolvency Act (the "BIA") made by the Insolvency Reform Act 2005 and the Insolvency Reform Act 2007 are, as a result, now in force.

In Official Assignee v Carrim the High Court considered the concept of a "gift" in the Insolvency Act 2006.

The Official Assignee sought to cancel insolvent gifts made by the bankrupt to complete a property purchase by a family trust settled by the bankrupt and Ms Carrim, the bankrupt's partner (as trustees).  The High Court considered:

The Australian Corporations Act 2001 provides that a company in liquidation that holds insurance for the benefit of third parties must pay the proceeds of the insurance policy to those third parties in priority to other creditors.  Insurance proceeds payable to third parties under this provision are subject to deductions of "any expenses of or incidental to getting in" those proceeds.  The liquidator of Brighton Hall Securities Pty Ltd sought directions from the court regarding the liquidator's entitlement to deduct his fees and expenses from the insurance proceeds.

This week’s TGIF considers the recent NSW Court of Appeal decision of Commissioner of Taxation of the Commonwealth of Australia v 4 Doonan Street Collinsville Pty Ltd (in liq) [2016] NSWCA 69 in which the Court considered the validity of the Commissioner of Taxation’s treatment of debits and credits in an insolvency context.

FACTS

In brief

Courts have recently approved a number of means by which external administrators can realise value from insolvent agricultural managed investment schemes and deal with the rights of growers and sponsor creditors:

On July 23, 2008, the Canadian Government proclaimed into force amendments to the Bankruptcy and Insolvency Act (Canada) (the "BIA") that provide super-priority security to claims, subject to specified limits, for unpaid wages ("Unpaid Wage Claims") and unpaid pension plan contributions ("Unpaid Pension Contribution Claims") in a bankruptcy or receivership proceeding, effective as of July 7, 2008.

On October 30, 2009, the Supreme Court of Canada released its long-anticipated decision in Quebec (Revenue) v. Caisse populaire Desjardins de Montmagny. At issue in this case (and two companion cases) was the legal characterization of Crown rights with respect to collected but unremitted GST and Quebec sales tax (QST) in the hands of a trustee in bankruptcy. The Supreme Court confirmed that the Crown is an ordinary unsecured creditor with respect to such amounts, subject to the rights of prior ranking security holders.

Summary of Facts