Stewart v Atco Controls Pty Ltd (in liquidation) [2014] HCA 15
The High Court has held unanimously that a liquidator is entitled to an equitable lien over settlement monies for litigation expenses which the liquidator incurred for the purpose of impugning a secured creditor’s charge, applying and confirming the principle in Universal Distributing in the process.
On 7 May 2014, the High Court handed down its eagerly anticipated decision on the scope of the liquidator’s equitable lien in Stewart v Atco Controls Pty Ltd (In Liquidation) [2014] HCA 15.
General corporate
ASIC reports on corporate insolvencies 2012–2013
Upon appointment, a liquidator will generally exercise control of as much of the company’s property as is available, so that it can be realised for the benefit of creditors. However, in some cases, a liquidator may not wish to retain certain property if it is unlikely that such property will provide a return to the liquidation.
The PPSA (Personal Property Securities Act) will celebrate its first birthday on 30 January 2013.
The PPSA introduced fundamental changes for business structuring arrangements. Assets that are subject to non-arms’ length lease or hire arrangements can be at risk if the entity that has possession of the property under the lease or hire agreement is placed in liquidation or receivership.
What is a PPS lease?
A ‘PPS lease’ is the lease or hire of property for a period (including options):
Including an unsecured creditor in an agreed payments waterfall does not by itself confer on that unsecured creditor the benefit of a mortgagee’s usual duties on enforcement of security, or a direct claim against the sale proceeds.
Europe has struggled mightily during the last several years to triage a long series of critical blows to the economies of the 27 countries that comprise the European Union as well as the collective viability of eurozone economies. Here we provide a snapshot of some recent developments relating to insolvency and restructuring in the EU.
A recent judgment in the Wellington High Court makes receivers, liquidators – and, potentially, the directors of companies in receivership and liquidation – personally liable for GST on the sale of mortgaged properties even where the mortgagee is not GST registered.1
The decision is being appealed and may be overturned as – in our view – it rests upon an unusual interpretation of the law.
The Court of Appeal has overturned a High Court decision, agreeing with receivers that certain sales by the debtor were not in the ordinary course of business, but rather payments to an unsecured creditor.
In this case1 when the debtor began to experience cash flow difficulties, it established another company to purchase stock, which the debtor would find buyers for. Sales were made either in the name of the new company, or the debtor would account to the new company for the sale proceeds.
A recent development in the ever-evolving jurisprudence associated with business rescue proceedings relates to the remuneration of the business rescue practitioner in the event that a business rescue fails. The Supreme Court of Appeal in Diener N.O. v Minister of Justice (926/2016) [2017] ZASCA 180 has recently confirmed that the practitioner’s fees do not hold a ‘super preference’ in a liquidation scenario and the practitioner is required to prove a claim against the insolvent estate like all other creditors.