Is the end result of Sakr Nominees continued “institutionalised time billing”?

While the insolvency profession might be satisfied with the final approval given to the liquidator’s remuneration, by Justice Ashley Black, in Sakr Nominees Pty Limited [2017] NSWSC 668, unthinking applications of the various judicial statements about proportionality can lead to unreasonable, and unfair, results. But an increased focus on legal fees, and other developments outside insolvency, put the decision into a lesser perspective.  […]

A New Zealand Ponzi – the final outcome of McIntosh v Fisk

The second report of the NZ insolvency working group had deferred consideration of the application of the voidable transactions regime under the Companies Act and the prejudicial dispositions regime under the Property Law Act pending a decision of the NZ Supreme Court.  That decision has now been given, on 26 May 2017, confirming the Court […]

External dispute resolution and complaints framework, and “debt managers”

Whether or how to regulate “debt management” firms comes up in the government’s decision to accept all 11 recommendations of the first comprehensive review of the EDR framework from an expert panel chaired by Professor Ian Ramsay.  Debt management “services” can range from advice on the pre-insolvency unlawful hiding of assets, to “debt repair”, to advice on […]

Penalising insolvent companies – a King Charles I comparison

Regulators seeking penalties against companies in liquidation often reveal, as I have recently commented,[1] some serious signs of frustration that their quarry has escaped their claims by going into liquidation, leading to the regulators, as I have also written, “kicking the company when it is down”.[2] Justice John Logan saw it this way in Commissioner […]

Australia today

“… Nazi troops responded to this secret emigration campaign by inspecting all Danish boats, using specially trained dogs to sniff out hidden Jews. To combat this problem, Swedish scientists developed a unique solution”.  …  Danes and Cocaine, 2016.   “The game’s up”: Australian Immigration Minister Peter Dutton said the October 1 deadline would sniff out “fake […]

“Straw directors”? no kidding!

The federal government is putting through laws that would give directors of companies greater latitude to incur debts that cannot be paid, with a view to assisting the process of restructuring their financially struggling company.  This “safe harbour” reform has been on the directors’ agenda for some years.  There are legitimate reasons for it, qualified by the following […]

Friendly and ‘friendly’

With the rather confusing term ‘friendly liquidator’ continuing to be used: by the media: Dirty Deeds: Inside Australia’s Biggest Tax Scam – ABC News;  reported in court decisions – “the boys will arrange a friendly liquidator who they pay off to liquidate the company. [X] knows plenty of dodgy liquidators”: R v Anquetil [2021] NSWCCA […]

Challenges to trusts by bankruptcy trustees – New Zealand law reform

A recent change to the New Zealand Insolvency Act 2006 (Schedule 1, new para (x)) has given power to the Official Assignee to bring a proceeding challenging the existence or terms of a trust, “even if the bankrupt could not have brought the proceeding if the bankrupt was not bankrupt and even if the bankrupt […]

NSW mines and their potential environmental impacts

In the context of the recent intersections between environmental protection laws and insolvency laws, in relation to CORA laws and Linc Energy in Queensland, and Redwater in Canada, NSW has now revealed concerns it has about the adequacy of funds set aside to meet rehabilitation costs resulting from mining company collapses. The NSW Auditor-General has reported that […]

APES 110 – accountants, whistleblowers and safe harbour advisers to note

Increased professional obligations of accountants, and insolvency practitioners, to refer breaches of the law to the authorities, are being considered at a meeting of the Accounting Professional and Ethical Standards Board (APESB) on 19 May. These have a potential impact by way of leaving whistleblowers with liabilities for which corporate law is yet to consider protection, and in respect […]

INSOL’s Directors in the Twilght Zone – Australia’s “medium risk” for its directors

INSOL International has released the 5th edition of its excellent review of the international laws regulating director conduct in the ‘twilight zone’ of a company’s financial distress approaching or already in insolvency. Australia features well in the report, with interesting views on its assessment of directors having only a “medium risk” of liability compared to its comparable international neighbours.     […]

World Bank Report on the Treatment of MSME Insolvencies

The World Bank has just released a report on small business insolvencies – Report on the Treatment of MSME Insolvency, 4 May 2017, (micro, small, and medium enterprises). Much of the Report is relevant to issues being confronted in Australia in this sector. As the Report says, MSMEs are a significant part of the global […]

INSOL’s Statement of Principles for a Global Approach to Multi-Creditor Workouts

INSOL International has issued a second and updated edition of its Statement of Principles for a Global Approach to Multi-Creditor Workouts, launched at the recent Quadrennial Congress in March 2017. These confirm and support the current Australian reforms for safe harbor protection to assist companies in financial distress. As INSOL says, the world of finance has changed […]

Ethics in the practice of law: a profession, a business or both?

The Australian Academy of Law is holding its second ethics themed Sydney event on Tuesday 20 June 2017, on the question of the law as a profession or a business. An eminent panel of participants in the Australian legal services market will debate the tension between the ancient fiduciary-based ethical principles on which the legal profession is […]

The fees of insolvency lawyers – increased scrutiny under the new law

Liquidators and trustees in bankruptcy are more accustomed to seeing their own fees come under judicial scrutiny than the fees of their lawyers. Legal fees are ‘mere’ disbursements in insolvency law, requiring neither creditor nor court approval. Justice Steven Rares’ recent judicial views about lawyers’ fees in Armstrong Scalisi Holdings v Piscopo [2017] FCA 423 , a […]

Funding personal and corporate insolvency regulation

ASIC and AFSA ASIC The funding of ASIC under the draft ASIC Supervisory Cost Recovery Levy Regulations 2017 by way of proposed levies on liquidators would be calculated according to [the sub‑sector regulatory costs in relation to the liquidator sub‑sector for the financial year minus the product of $2500 and the sub‑sector population in relation to […]

Gift-cards resurrected

The 2016 “gift-card” report of the UK Law Commission examined whether there should be greater protection for consumers who lose deposits or gift vouchers when retailers or other service providers go into insolvency. It made some limited recommendations, none of which have been enacted. Australia’s own 2016 Senate Committee inquiry in Australia into gift vouchers arose […]

Insolvency Law Amendment Bill 2017 (No 1?)

The government is proposing to amend only some of the insolvency law changes under the Insolvency Law Reform Act 2016 that have raised concern. The remuneration approval process now proposed is that if an insolvency practitioner (IP) employs a staff member, and a “related entity” of the IP (their firm) gains from that, and the […]

Unpaid super – just rounding up the usual suspects

A Senate Committee has produced yet another typical report that goes round in the usual circles of recommending the implementation of previous recommendations – director identity numbers, more ASIC and ATO exchanges of information, and more “enforcement” and “resources” for the regulators. These are all the familiar and usual suspects in Committee reports, with pliant media in tow.   Reform lies […]

Japanese restaurant’s accountant liable for fair work breaches

The recent court finding that an accountancy firm was liable for contraventions of the Fair Work Act by its client, to which the firm provided payroll services to a client, is indicative of a trend in the law extending and expanding the reach of liability to those who are found to be “involved” in the breach of […]