Category: Insolvency Law

Insurers on the hook: High Court holds that insurers of insolvent companies can be joined to proceedings commenced by third parties against those companies

The High Court of Australia has held unanimously[1] that a person who commences proceedings against an insolvent company or a bankrupt individual can join that defendant’s insurer to the proceedings and seek a declaration that the insurer is liable to indemnify the defendant.

 

Automatic set-off is not that automatic

The decision is significant because it confirms that a payment of a dividend to a creditor does not necessarily extinguish the company’s claim for the balance in fact owing to it.

Modified universalism: Full Federal Court protects the rights of a local creditor in a cross-border insolvency

The Full Federal Court has confirmed a “modified universalism” approach to cross-border insolvencies, and provided guidance on what is required for the “adequate protection” of rights of local creditors under the Model Law on Cross-Border Insolvency (‘Model Law’), as enacted in Australia by the Cross-Border Insolvency Act 2008 (Cth).

High Court Lets Liens for Litigating Liquidators Lie

The High Court held unanimously that a liquidator is entitled to an equitable lien over settlement monies for litigation expenses which the liquidator incurred for the purpose of impugning a secured creditor’s charge, applying and confirming the principle in Universal Distributing in the process.

What a difference a day makes – When does the relation back period start?

In insolvency law the calculation of precise periods of time is important. Insolvency practitioners need to know exactly when limitation periods end in order to preserve potential claims. The “relation back period” is one of the more important time periods relevant to calculating limitations, and yet there is surprisingly little authority on exactly when the relation back period starts.