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Michael Murray’s on-going commentary on issues in corporate and personal insolvency law and related policy and law reform, in Australia and internationally. Given the scope of insolvency, this extends to business, consumer and professional conduct, and ethics, governance and regulation, criminal, tax, environmental and administrative law, and the courts and government.

 

The IBA Annual Conference Sydney, 8–13 October 2017

Among many sessions across a wide range of legal disciplines, the IBA conference has this series of insolvency sessions.

Avoiding that sinking feeling: navigating shipping insolvencies

The Hanjin collapse at the end of August 2016 left 147 vessels stranded around the world, unable to enter port. Hanjin was the latest in a series of high-profile shipping insolvencies, with OW Bunker in November 2014 and Copenship, STX and Swiber in between. Meanwhile, we are seeing high levels of consolidation activity as the shipping industry seeks to restructure businesses and financing.

We will look at the immediate problems arising for stakeholders when a shipping business announces that it will not be paying the bills, including threat of arrest and refusal of access to vessels. How are debtors and creditors best advised? How can charters be terminated and cargo returned or compensated for, and to what extent will insurance respond? How is business affected when the original financiers sell their non-performing loans to investors? We will explore the cross-border insolvency issues and application of the United Nations Commission on International Trade Law (UNCITRAL) Model Law to seek to achieve ‘modified universalism’, and we will hear about Hanjin’s recognition process in Australia and cover other jurisdictions such as Singapore, South Korea, Malaysia and the US.

Trading when the darkness starts, with a focus on funding companies in the twilight zone

An interactive panel discussion involving leading practitioners from turnaround advisory firms, insolvency practitioners, forensic accountants and criminal law practices with extensive experience of advising businesses facing stress and distress, of the alternative sources of funding available (eg, senior and mezzanine debt, equity, asset based loans and trade finance) and the considerations to be taken into account by stakeholders (directors, shareholders, lenders and managers) at each phase, including an analysis of the potential civil and criminal liabilities that might be incurred and how to avoid the pitfalls.

When investors and founders collide: preventing, diffusing and resolving disagreements about corporate strategy, in good times and in times of financial crisis

Typically, many constituencies are involved in making managerial and strategic planning decisions for a growing company: founders, active strategic investors, directors and other shareholders. Sometimes, the goals and priorities of these constituencies do not align, which can lead to a crisis in decision-making. The process can be complicated further if the investor or director is also a supplier or customer and, as such, engages in related party transactions with the startup. Additionally, the misalignment of priorities and goals can become even more acute in times of trouble, when cash is tight and the company is in financial crisis. Through real-world case studies this session will explore:

  • governance best practices to avoid deadlock or prevent a veto situation that could paralyse the company;
  • funding through revenue or investment: anticipating mechanisms for additional capital contributions that address anti-dilution concerns while realistically providing cash-flow support in times of financial crisis, or at times when the founder and other constituencies disagree on a growth strategy;
  • consideration of how related party transactions affect the dynamic;
  • the additional stress placed on the decision-making process if the company also faces a time of financial crisis when the consideration of insolvency or bankruptcy concepts comes into the equation, and planning for ‘distressed funding’ options; and
  • lawyering in times and crisis, identifying ‘who is the client’ and the use of special committees.

Rome is still burning: who has the most efficient insolvency system?

Building on the results of a panel discussion at the 20th Annual Global Insolvency and Restructuring Conference in Barcelona, 18-20 May 2014, this interactive panel revisits the important issue of the cost-efficiency of insolvency proceedings. The discussion will involve experienced insolvency practitioners from jurisdictions such as Singapore and Italy, which have recently reformed their insolvency laws, a judge from Australia who has been involved in recent high-profile cases, and a representative from the World Bank Group, with the aim to find out which elements make for a time and cost-effective insolvency procedure.

Recognition of insolvency decisions/foreign office-holders in Australia

Australia is open for solvent and insolvent global restructuring business: a discussion of how Australian courts respond to applications for recognition of, or assistance with, foreign insolvency proceedings.

Full details are at the IBA website.

 

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