Reform of insolvency communications by email, and beyond

Corporate insolvency law in Australia concerning communications with creditors needs modernising, and well beyond what is available in 2020.  When early cars, then termed locomotives, were first allowed on the road England’s ‘Red Flag Act’ of 1865 required a man with a red flag to walk ‘60 yards’ ahead to alert ‘the Riders and Drivers […]

New UK Insolvency Code of Ethics

A new version of the Insolvency Code of Ethics will apply from 1 May 2020 to all insolvency practitioners in the UK. In its reliance on ‘disclosure and consent’ as a way of managing a conflict, it may differ from code guidance in Australia.   ————- It follows a 2017 consultation saying that the Code […]

Three liquidators for three intertwined companies

A Judge appointed individual liquidators to three separate companies – OT, AGM and Ozifin – rather than a common liquidator for all of them, even though their affairs were complex and intertwined. This necessitated their joint application to the court for permission to share company and individual information between themselves, including ‘personal information’, in order […]

Winding up a foreign company – Blumenthal’s Tipsy Cake

Tipsy Cake was wound up on 12 February 2020, having had provisional liquidators appointed on 20 December 2019, who then became the liquidators. The company carried on a restaurant business under the name “Dinner by Heston Blumenthal”, a well known cook, in the Crown Casino complex in Melbourne. It is a Part 5.7 body under […]

Too much independence? a re-issue of my 2016 commentary

My analysis below of the law of insolvency practitioner independence, written in October 2016, is reissued in February 2020 in light of the thesis of Dr Elizabeth Streten and her findings about ARITA Code and what she suggests is a disconnect between the law and the code.  Given the findings of Dr Streten about Australian […]

Independence of debtors’ chosen liquidators

If directors apply to the court have their company wound up in insolvency, or in fact support an application for winding up, should there be any predisposition against appointing their nominated liquidator? The decision in Avant Garde Investments[1] suggests yes. Receiver F applied under s 459A of the Corporations Act that the company be wound up […]

A deferred tax debt can remain due and payable

If a company owing a debt enters into an agreed payment arrangement with the creditor, that can serve to defer that debt as being ‘due and payable’ for the purposes of determining the company’s insolvency – that is, whether the company can pay all its debts as when they become due and payable.[1] It depends […]

Million pound fines for breach of insolvency standards

The million pound fining of an insolvency firm and its administrators by the English accounting body ICAEW illustrates the differences between the UK’s insolvency co-regulatory regime, and a similar scheme soon to be adopted in New Zealand, and that of direct regulation in Australia. Comet The fine was issued by consent in relation to the […]

A pointless distinction in corporate insolvency

In the 19th century, where much corporate insolvency law thinking still remains, a distinction was made between court ordered liquidations on the one hand, and creditors’ voluntary liquidations (CVLs), both solvent and insolvent, on the other. An accident of insolvency history, as an early edition of Ford says, though perpetuated for over 100 years. The […]

Dangers in liquidators running a ‘skinny case’

” … it might not be seen to be unreasonable [for insolvency practitioners] to avoid expending funds producing affidavits in relation to issues which might ultimately be agreed upon”. But .. All litigants and their lawyers have obligations to pursue matters economically, or, in the Federal Court, according to the ‘overarching purpose of the civil […]