Do funds paid into court as security for costs pursuant to a consent order give rise to a security interest pursuant to s 12(1) of the Personal Property Securities Act 2009 (Cth) (PPSA)? No, according to the Honourable Justice M Osborne. However, it may be that other forms of security for costs do.
Category: Insolvency Law
Justice Black’s decision in Re BCA National Training Group confirms that s 561 of the Corporations Act 2001 (Cth) only operates where there is a contest between preferred creditors and a secured party in relation to circulating asset realisations.
In Metal Manufactures Pty Ltd v Morton, the High Court has confirmed that set-off under s 553C of the Corporations Act 2001 (Cth) is not available as a defence to a liquidator’s claim to recover an unfair preference.
The High Court has unanimously found that Pt 5.7B of the Corporations Act does not incorporate the “peak indebtedness rule” and has provided guidance as to the proper approach to assessing a “continuing business relationship” for the purposes of s 588FA(3)(a).
The Victorian Court of Appeal has re-affirmed that a director’s signature can indicate an intention to provide a personal guarantee, even where that signature is qualified. The Court also confirmed that a creditor’s right to interest under a director’s guarantee is not affected by a DOCA.
The prohibition against creditor-defeating dispositions under s 588FDB has been considered and applied for the first time since its introduction over two years ago. The conduct in question was found to be a brazen and audacious example of phoenixing and the Supreme Court of Victoria made orders voiding the relevant contract.
Unreasonable director-related transactions: can the available remedies be ordered in the case of a solvent company?
In a recent decision, Justice Anastassiou of the Federal Court held that liquidators of a solvent company may be entitled to the remedies available under the Corporations Act where that company is found to have made an unreasonable director-related transaction in breach of section 588FDA of the Act.
In a members’ voluntary winding up, the Court exercised its powers under s 1322 of the Corporations Act 2001 (Cth) and s 90-15 of the Insolvency Practice Schedule (Corporations) to cure issues arising from the passing of important members’ resolutions by power of attorney.
The Corporations Amendment (Corporate Insolvency Reforms) Act 2020 (Cth) has expanded the methods by which documents under Chapter 5 of the Corporations Act 2001 (Cth) can be served, even where the person being served has given no indication that they will accept service electronically.
The Full Court of the Federal Court confirms that a statutory set-off under s 553C(1) of the Corporations Act 2001 (Cth) is not available against a liquidator’s claim for the recovery of an unfair preference under s 588FA of the Act.
In ASIC v King, the Federal Court recognised the Court’s jurisdiction to bankrupt a debtor on the petition of a creditor who is owed a debt that is not provable in bankruptcy (in this case, a pecuniary penalty order), finding that it is a matter of discretion whether to make a sequestration order.
The Court considered the meaning of insolvent in a contractual context, distinguishing it from the meaning of insolvent for the purposes of the Corporations Act. It concluded that the respondent was insolvent at the relevant time, despite the fact that it was continuing to trade at the time of the hearing, years later.
The Court of Appeal’s judgment in Australian Sawmilling Company Pty Ltd (in liq) v Environment Protection Authority  VSCA 294 clarifies that a liquidator may be an ‘occupier’ for the purposes of the Environment Protection Act 1970 (Cth).
McCallum, in the Matter of Re Holdco Pty Ltd (Administrators Appointed) (No 2)  FCA 377 (21 April 2021)
Valuing intellectual property – registering security interests concerning intellectual property on the Personal Property Securities Register (“PPSR”)