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.
Category: Insolvency Law
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).
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.
Perfection requirements of transitional security interests under the Personal Property Securities Act 2009 (Cth)
Appeal from liquidators’ decision to reject claim for the return of cleaning equipment subject to retention of title. Consideration of retention of title clauses and the application of the transitional security agreements under Personal Property Securities Act 2009 (Cth).
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.
A wider ambit for the unreasonable director-related transactions provisions of the Corporations Act?
In Vasudevan & Ors v Becon Const & Anor  VSCA 14, the Victorian Court of Appeal adopted a broader interpretation of the phrase ‘for the benefit of … a director’ in s 588FDA of the Corporations Act 2001 (the Act) than has been accepted in previous cases. The decision has the potential to widen the ambit of the unreasonable director-related transactions provisions of the Act.
Challenge to creditor standing on application to wind up appellant company on grounds of insolvency. Standing examined with reference to bona fides of the appellant’s asserted counter claim and circumstances surrounding the failure of appellant to take steps to advance asserted counter-claim or demonstrate solvency. Court held respondent had standing as a creditor in accordance with s 459P(1)(b) Corporations Act 2001 (Cth).
An application for an inquiry into the conduct of receivers and managers of the assets and undertaking of a corporation based in Western Australia pursuant to section 423 of the Corporations Act 2001 (Cth). The decision highlights the importance of exercising commercial judgment when considering appointments.
The power of the Court to modify the operation of the UNCITRAL Model Law on Cross-Border Insolvency.