Power to sell – Federal Court exercises discretion to allow company to realise trust assets
In Brooks, in the matter of Tease Hair & Spa Pty Ltd (in liquidation),[1] the Federal Court made orders in favour of the Liquidator, pursuant to section 90-15 of Schedule 2 to the Corporations Act 2001 (Cth) (Insolvency Practice Schedule (Corporations)) and section 47 of the Trustee Act 1989 (Tas) allowing the Liquidator to realise […]
ReadmoreShell company leads to successful unconscionable conduct claim for ‘wilful blindness’
The High Court has resolved to hold lenders responsible where they are wilfully blind to the position of a guarantor or take advantage of an individual’s lack of business acumen or financial resources. This extended to the use of independent legal and financial advice certificates (certificates) in relation to asset-based lending. The decision serves as […]
ReadmoreConsidering Conflicts: Queensland Supreme Court rejects application to restrain liquidators’ choice of representation
This matter involved the former director and former accountant of CGS Constructions (QLD) Pty Ltd filing proceedings seeking an injunction to restrain the Liquidators from engaging Cornwalls Lawyers to act on the basis that: Cornwalls also acted for a substantial creditor, Union Share Pty Ltd; and the Liquidators, by engaging Cornwalls, had manifested a tendency […]
ReadmoreA cold winter for the A Team – Court freezes funds and assets
Between 31 May 2022 and 7 June 2022, ASIC obtained three freezing orders against the Mr Hopkins and his companies. In doing so, the Federal Court of Australia ordered: 1) the Defendants’ assets be frozen; 2) the disclosure of existing assets to the Court; 3) the appointment of a receiver over digital assets; and 4) […]
ReadmoreAnti-phoenixing laws demystified: The Victorian Supreme Court considers the creditor-defeating disposition regime
In Re Intellicomms Pty Ltd (in liq) [2022] VSC 228, it was determined that a sale agreement was a creditor-defeating disposition within the meaning of section 588FDB of the Corporations Act 2001 (Cth) (Act) and voidable pursuant to section 588FE(6B) of the Act. The Court held that, the consideration payable by the transaction was less […]
ReadmoreAn easy win? Obtaining summary judgment in the absence of the Defendant
In the matter of Squirrel Limited (In Liquidation), the Court considered an application for summary judgement against a director for insolvent trading. In doing so, the Court considered the principles underpinning a director’s duty to prevent insolvent trading and the compensation payable as a result. Background The first plaintiffs, Mr Brent Kijurina and Mr Richard […]
ReadmoreFailure to launch: Liquidators fail to establish abuse of process in public examination summonses
Public examination can be a useful tool for parties in a liquidation to obtain information about matters relating to a company’s affairs. In the matter of Jewel of India Holdings Pty Ltd ACN 141 963 813 (in liquidation) [2022] NSWSC 356, the Court considered whether summonses for public examination, that were issued by the former […]
ReadmoreOptimising voluntary administration: In the matter of Merchant Overseas Logistics Pty Ltd [2022] VSC 154 opens the door for expediated creditor returns through secondary voluntary administration.
The Supreme Court of Victoria has considered the viability of allowing a company to enter a second voluntary administration after going into liquidation following a failed DOCA. The Court considered that rather than maintain a state of liquidation, the secondary voluntary administration process would better serve the best interests of creditors and optimise the efficiency […]
ReadmoreTrying to pull a fast one: An attempt to use family law orders to defeat creditors
Family law processes cannot be used to defraud creditors. In Re ZH International Pty Ltd (in liq),[1] the Supreme Court of New South Wales held that transfers of property from a company to the directors and shareholders of that company as part of family law proceedings were voidable transactions under section 588FF of the Corporations […]
ReadmoreExpansive Examination – High Court significantly expands public examination rights
In Walton & Anor v ACN 004 410 833 Limited (formerly Arrium Limited) (in liquidation),[1] the High Court considered whether a summons issued to examine a former director of Arrium Limited (Arrium) was an abuse of process in respect of section 596A of the Corporations Act 2001 (Cth) (Act). In doing so, it recharted a […]
ReadmoreWas there a foreseeable risk of harm? Supreme Court of Western Australia finds directors were in breach of their statutory and common law directors’ and officers’ duties
Defendants to a proceeding related to a breach of an Asset Sale Agreement, successfully joined directors to the action by way of a third party notice, seeking damages for liability incurred where those directors had breached their directors obligations to discharge their duties with due care and diligence (Section 180(1) of the Corporations Act 2001 (Cth)). […]
ReadmoreThe importance of being cautiously aware of contractual terms relating to insolvency termination events
In the matter of Carna Group Pty Ltd v The Griffin Coal Mining Company (No 6) [2021] FCA 1214, the Court held that Griffin Coal Mining Company (Griffin) was insolvent, without having to prove so under the section 95A Corporations Act 2001 (Cth) (Corporations Act). This was in accordance with a contractual provision where it […]
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