The recent unanimous Victorian Court of Appeal decision in an appeal from Re Amerind has been widely welcomed by insolvency practitioners and others, as it brought some clarity to the question of whether the statutory order of priority applies to trust creditors. However, not all aspects of the decision will be as widely welcomed. In particular, in favouring a previous controversial decision of the court suggesting that trust assets should be applied in paying non-trust creditors, the Court of Appeal has resurrected a longstanding debate. Trust creditors and beneficiaries will be concerned if it is followed. Further, though insolvency practitioners and statutory preferred creditors will be generally pleased by the court's adoption of a wide interpretation of what is a 'circulating security interest' for the purpose of determining statutory priorities, it will concern secured creditors. Partner Philip Blaxill, Senior Finance Counsel Diccon Loxton and Associate Lucas Tan reflect on the decision and its ramifications.Click here for more.
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