Objections to a bankrupt’s 3 year discharge in Australia – mixed messages and unfair law
Apart from Australian law imposing a long period for a person to be subject to the restrictions and stigma of bankruptcy, of 3 years, it allows trustees to extend that period of time, up to 8 years, and based on some rather mixed messages and perhaps unfair law. Objections to discharge A trustee may lodge […]
You call that a lockdown? Australia’s bankruptcy laws
If those in small business think the lockdowns are tough, for weeks or even months at a time, the government has a much longer lockdown for them if their business happens to succumb to the financial pressures and they find themselves bankrupt. While bankruptcy is sold as being able to “release you from most debts, […]
ASIC’s corporate plan, and the 27 August hearing before the PJC
With ASIC having appeared before the Parliamentary Joint Committee on Corporations and Financial Services on 27 August 2021, ASIC’s Corporate Plan 2021-25 has also just been published which outlines its priorities over the next four years. It is said to be consistent with ASIC’s new Statement of Intent released in response to the Australian Government’s […]
Review of Australia’s safe harbour protection from insolvent trading – remember s 588HA [updated]
The federal government has finally made arrangements to have Australia’s “safe harbour” from insolvent trading law reviewed – s 588GA, introduced in September 2017. But the review must be wider than the media release issued? The minister’s media release? The minister’s media people have him say that the panel will be required to “determine if […]
What do creditors get from ‘successful’ recovery actions by insolvency practitioners?
A Judge has ordered that Trustees in bankruptcy file “evidence that identifies the benefits the creditors of the bankrupt estate are likely to receive if the Trustees succeed” in the voidable transaction claims being brought. That was ordered in the particular circumstances of the case, but it would be a useful order for judges to […]
Cleaning up after failed oil and mining operations – new New Zealand laws, and other ideas
The cost of environmental clean-up of mining and other resource projects where the company has gone into liquidation is a live issue in Australia, with the on-going issues following the liquidation of the Northern Oil and Gas Australia (NOGA) group of companies, and with similar issues in New Zealand, and elsewhere internationally. NZ is introducing […]
The contributions of bankruptcy trustees to AFSA’s regulation of criminal conduct
Bankruptcy trustees, and liquidators, and creditors in insolvencies, contribute much to the government, in effect for free. In a recent bankruptcy disciplinary decision, the Sydney trustee’s plea, apparently in mitigation, that he had ‘assisted’ the Inspector-General by way of giving evidence in a bankruptcy prosecution, in Launceston, Tasmania, was given little value. The committee saw […]
Bankruptcy – transfer of files from the Official Receiver to private registered trustees, with 20% to women
Australia’s AFSA has announced that since 29 July 2021, it has changed the way it allocates bankrupt estates to bankruptcy trustees working in the private sector. Changes to AFSA’s approach to transferring matters | Australian Financial Security Authority. This includes allocating 20% of matters to women trustees. AFSA says that its “main priority as the […]
The high cost of ASIC’s regulation of liquidators, in a deregulatory environment
The proposed annual ASIC ‘industry levies’ imposed on liquidators in Australia, to fund the cost of their regulation, prompts this brief comparison with what Australian bankruptcy trustees pay, and insolvency practitioners in the UK and New Zealand. This coincides with the Prime Minister’s push for greater deregulation. ASIC and liquidators Australia’s corporate regulator, ASIC, has […]
Assigning bankruptcy claims to a former trustee
A 5 day bankruptcy hearing was cancelled in March 2021, in relation to matters occurring in 2012, being challenged in a 2014 bankruptcy by way of recovery actions being brought in 2019. This cancellation followed the suspension in February 2021 by AFSA of the registration of the trustee litigant in the action, in relation to […]
Winding up Forum Finance
In ordering that liquidators be appointed to Forum Finance Pty Ltd on 9 July 2021, the Federal Court explained the nature of a winding up on the just and equitable ground, and its history. Westpac had applied for the appointment of provisional liquidators both on the ground of insolvency, under Part 5.4 of the Corporations […]
Insolvency practitioner charge-out rates – the cost of carrying the State
In making a winding up order against Forum Finance,[1] Justice Michael Lee made this comment about the hourly fees of the proposed liquidators: “24 … The prevailing rate for partners of insolvency firms doing this work has reached a stage (one might be forgiven to think somewhat remarkably) where a practitioner can charge $847 (inclusive of GST) in […]
Employees’ redundancy rights on the insolvency of their employer
There are now a number of decisions from the Administrative Appeals Tribunal reviewing decisions of the Fair Entitlements Guarantee where the question is whether an employee whose employment was terminated as a result of the business going into liquidation is entitled to a redundancy payment from FEG. Unless the right to redundancy is contained in […]
Cross-border insolvency protection of a ship on its way to Australia
An Italian shipping company – Michele Bottiglieri Armatore SpA – which is subject to Italian restructuring protection, a concordato preventivo – has successfully obtained a stay in Australia against the arrest by a creditor of one of its vessels – MBA Giovanni – which is due to arrive in Australia imminently, if it hasn’t already. […]
The insolvency rule in ex parte James – another in a series of cases ‘dancing on pinheads’
A trustee in bankruptcy in England rejected a £5.7m proof of debt lodged by the revenue authority [HMRC][1] on what was found to be a technical though correct point of law. This raised what the Deputy Insolvency and Companies Judge said was “an interesting issue concerning the interaction between revenue and insolvency law in relation […]
Australian small business insolvency law – a review
Several stars aligning at the end of 2020-2021 prompt this review of where Australia is at in the area of small business insolvency law. Small business is presently much in focus, positively, with World MSME Day celebrations[1] and the Small Business Ombudsman promoting its economic contributions – accounting for over 97% of businesses, employing over […]
Regulatory penalties
Sanctions imposed by courts for breaches of competition or regulatory laws have to tread a line between being so severe as to put an otherwise worthwhile company out of business, but severe enough for the purposes of deterrence and reprobation. Focus on the future of the company as impacted by the financial cost of the […]
Australian High Court – special leave sought in bankruptcy Ponzi case – 139ZQ
An application for special leave to appeal to the High Court[1] has been made in a bankruptcy matter involving a section 139ZQ notice demanding payment of $12.5m in respect of a failed Ponzi horse race betting syndicate. The Full Federal Court upheld a trial decision that liability under s 139ZQ Bankruptcy Act could be pursued […]
Insolvency services for sale
There seem to be some rather unhappy insolvency practitioners at the moment bemoaning the low levels of insolvencies – yes, unhappy because more businesses and individuals are, apparently, remaining financially stable – with the prospect of an ‘insolvency tsunami’ having passed, and speculating when an ‘uptick’ (and other such positive terms) in the ‘insolvency market’ […]
Trustee “entirely blameless” in his dealings with a mentally infirm bankrupt
While there is now greater training available in dealing with those suffering mental illness for professionals working in debt counselling and bankruptcy,[1] it remains the case that no-one should be making a medical diagnosis or offering any purported medical advice. In a recent decision, a woman who had been made bankrupt claimed that her trustee […]
Why do we have preference recoveries in insolvency?
In finding that the ‘peak indebtedness rule’ did not in fact exist, the Full Federal Court[1] in Badenoch v Bryant has also questioned the central aspect of its purported purpose that “if the continuing business relationship commenced at the beginning of the running account (some years prior to 2012), questions may arise as to whether […]
Electronic delivery of documents in insolvency law
Some belated concern has been raised about the potential for new corporate insolvency law allowing a winding up demand to be served on a company by email, thereby creating the groundwork for a winding up order against the company. [1] See Mark Wellard’s article in the Insolvency Law Journal. ‘Belated’ because email service of bankruptcy […]
Insolvent trading convictions set aside on mental health grounds
Following convictions and imprisonment for insolvent trading arising from the 2009 collapse of Kleenmaid, its founder, Andrew Young, has succeeded on appeal but on one ground only, that the trial judge should have put to the jury the question of the mental fitness of Young to stand trial. R v Young [2021] QCA 131 (15 […]
Licensing of insolvency practitioners – decision making principles from New Zealand [updated post 13 June 2021]
Mr Damien Grant, the New Zealand insolvency practitioner who successfully challenged RITANZ’s decision to deny him the right to practice as a liquidator, is now registered, according to the RITANZ website and Stuff. See Controversial liquidator Damien Grant wins battle for career | Stuff.co.nz 14 May 2021. RITANZ’s reasons for denial were the subject of […]
