NSW Court of Appeal casts a shadow over voting rights
Whilst the power of a chairperson to exercise a casting vote at creditors’ meetings is a useful mechanism to resolve a deadlock in voting, it does not confer unconstrained discretion. The recent Glenfyne Appeal[1] provides valuable guidance as to the appropriate exercise of a casting vote and also serves as a reminder of the Court’s […]
ReadmoreLiquidation does not automatically remove a corporate trustee – Court directions may be required
In KSK Holdings (Australia) Pty Ltd (in liquidation) [2019] NSWSC 1463 a liquidator sought directions from the Supreme Court of New South Wales under section 90-15(1) of the Insolvency Practice Schedule (Corporations) at Schedule 2 of the Corporations Act 2001 (Cth). The liquidator sought clarity as to whether KSK Holdings (Australia) Pty Ltd (in liquidation) (KSK Holdings) remained trustee […]
Readmore“Legal Phoenix” – The burdens and benefits of professional advice
In ACN 093 117 232 Pty Ltd (In Liq) v Intelara Engineering Consultants Pty Ltd (In Liq) [2019] FCA 1489, the court considered whether a “legal phoenix” arrangement entered into after receiving professional advice was in fact a voidable transaction. The facts Intelara Pty Ltd (OldCo) operated an engineering consultancy business and after experiencing financial difficulties in […]
ReadmoreHolding company director as “officer” of subsidiary under the Corporations Act
In ASIC v King [2020] HCA 4, the High Court considered whether a director of a holding company was an “officer” of a subsidiary company for the purposes of the Corporations Act (the Act). If so, the “officer” may have been liable for breaches of duties as an “officer”. Background Mr King was the CEO and an executive director of […]
ReadmoreA warning to Liquidators: comply with your disclosure obligations or face dismissal of your unfair preference proceedings
In Clifton (Liquidator) v Kerry J Investment Pty Ltd trading as Clenergy [2020] FCAFC 5, the Full Court of the Federal Court of Australia found that: where the Liquidators failed to comply with their discovery obligations and the Court could not be satisfied regarding the existence of documents which might be deployed by innocent parties to meet […]
ReadmoreWhy courts from different jurisdictions are sitting together: Australia’s experimentation with joint hearings
Australian courts regularly cooperate with courts of different jurisdictions, both domestically and internationally. We see this, for example, when courts transfer proceedings to different jurisdictions, or stay proceedings to allow the continuation of proceedings in different jurisdictions. In recent times we have also seen the rise of a more direct form of judicial cooperation: joint […]
ReadmoreCOVID-19 | Asset Protection
The issue of asset protection often doesn’t materialise until it’s too late, however the current COVID-19 crisis should serve as a reminder that all those who personally own a business, are company directors, or even those in professional services should take legitimate steps to protect their assets. Much like when Kerry Packer told everyone who […]
ReadmoreCOVID-19 | Director’s duties amid recent changes to insolvency law
With the impact of COVID-19 well and truly being felt by business, many may be heartened by the Government’s recent temporary changes to insolvency laws. What all directors need to remember however, is that their conduct is not only policed by sections 588G and 588M of the Corporations Act 2001 (Cth) (Act), but also by […]
ReadmoreAnti-phoenixing legislation finally passes through Parliament
After having been introduced to the Commonwealth Parliament on 13 February 2019, then re-introduced on 4 July 2019, the Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019 finally passed through both Houses on 5 February 2020. As its name suggests, the Bill introduces a number of new measures aimed at combating illegal phoenix activity in Australia. Illegal […]
ReadmoreAn overview of the changes to the witnessing requirements for Queensland Land Registry forms
The Natural Resources and Other Legislation Amendment Act 2019 (Qld) introduced additional requirements for witnessing documents including: requiring the witness to take reasonable steps to verify the identity of an individual and to ensure the individual is the person entitled to sign the document; requiring the witness to keep a written record of the steps they took […]
ReadmoreTo carry out no or little investigation and to say nothing is not an option – a warning to insolvency practitioners
The Federal Court has issued a warning to insolvency practitioners, involved in voluntary administrations, to ensure adequate investigation and reporting occurs of matters that have the potential to materially affect the outcome of the administration. In Adelaide Brighton Cement Limited, in the matter of Concrete Supply Pty Ltd v Concrete Supply Pty Ltd (Subject to Deed […]
ReadmoreCOVID-19 | Emergency Amendments to Insolvency Laws
Government moves to amend insolvency laws The Commonwealth Government announced a range of temporary amendments to certain insolvency laws as part of its economic response to COVID-19. The amendments will temporarily affect insolvency laws, corporate governance, and directors’ duties. The purpose of the amendments is to support otherwise viable businesses which will temporarily suffer financial […]
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