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.
Category: Insolvency Law
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”)
The New South Wales Supreme Court has provided welcome guidance on the relevance of future events to the question of solvency. Specifically, the Court has provided a roadmap on the relevance of (i) future debts which the company may not be able to repay; and (ii) the ability of the company to compromise those debts.
The Full Court of the Federal Court considered the continuing business relationship exemption under s 588FA(3) of the Corporations Act and the validity of the peak indebtedness rule as a matter of Australian law.
The Court of Appeal has clarified the application of the unfair preference regime to payments by third parties to creditors at the direction of the debtor. In short, to be ‘from’ the debtor, the payment must diminish the assets available to its other creditors. Merely being related parties will not be sufficient.
The 2020-21 Federal Budget papers released on 6 October 2020 contained a potentially significant measure relating to the carry-back of company income tax losses to prior years, as explained in this note.
The Supreme Court of Victoria recently delivered judgment in the matter of Redstar Transport Pty Ltd (in liq). The case provides helpful guidance for liquidators of corporate groups looking for remuneration recovery absent a pooling order.
PERSONAL PROPERTY SECURITIES REGISTER (PPSR) – Applicant registered security interest in collateral (helicopter) – helicopter stolen and sold to other party – other party on-sold helicopter to third party and applied to register financing change statement to end applicant’s interest – meaning of “security interest” – decision affirmed
A recent judgment of O’Callaghan J confirms that rental expenses incurred during the statutory ‘no liability’ period following an administrator’s appointment may be afforded priority in a subsequent winding up, despite the fact that the administrators are not personally liable for those expenses.
The New South Wales Court of Appeal has allowed an appeal against orders for distribution from a co-mingled fund held by insolvent entities and, in doing so, has provided guidance for liquidators and creditors alike on the various methods for distribution and the principles of tracing.
This note summarises the changes to the statutory demands regime and to insolvent trading laws applying to directors and holding companies effected by the Coronavirus Economic Response Package Omnibus Act 2020 (Cth).