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What’s the scope of UDRT?

The right to bring unreasonable director-related transaction claims (“UDRT”) differ between States and Territories. Yet UDRT is Federal legislation (s588FDA Corporations Act) and should be universally applied. UDRT refers to a claim brought by a liquidator in circumstances where a transaction (eg money payments or uncommercial asset transfers, #phoenixactivity) is made to the benefit of a…

Assignment of debts

Sally is a successful entrepreneur, focusing most of her attention on buying defaulted debts from financial institutions. It’s lucrative if done right, but sometimes it can be a headache – as she recently found out. Back in October 2011, Sally purchased $15k in debt from Westpac, for only $500. The debt was owed by Mark to Westpac, from back in 2005. This…

High Court HDOCA special leave

The High Court has this morning granted special leave to Mighty River to appeal the holding-DOCA decision from the Full WA Court of Appeal. Avid followers might recall that the Court of Appeal held that holding-DOCAs were permitted under the Corporations Act. Time will tell if this holds up. … more to come once the…

What’s equitable tracing?

If you spend plenty of time around insolvency professionals like I do, you tend to hear the phrase “equitable tracing” (“ET”) thrown around a bit. It is a simple, yet easily forgotten, concept, and can serve an important purpose – like issues around: #Voidables, #PMSIproceeds or commercial loss. Imagine you gave Joe $50k to start-up a new venture. Joe is lacking…

588FF orders

Wow! The Supreme Court of Victoria has recently handed down a case that has some interesting obiter points on s588FF of the Corporations Act (the voidable transaction relief provision). 1. Although the Plaintiff was not seeking curial orders under s588FF; and 2. The liquidator itself had not applied for such orders; 3. The plaintiff was allowed…

Secured, don’t complete a POD!

Mrs B has been Head of Credit for AB Ceilings P/L for 25 years and has seen the credit industry gradually improve. Just not the introduction of the #PPSA. With more than 500 pages of legislation and terms like “PPS Lease”, “AllPAAP” and “PMSI”, how was she to know that what she did was wrong. Mind you, she…

AAF gets an extra $1m

It appears that the Assetless Administration Fund (“AAF”) is getting an extra $1m per year for the next 3 years. For those unaware, the AAF is a fund setup by #ASIC to finance investigations and reports by liquidators into the failure of companies with little to no assets. The $1m increase to the AAF was…

How not to set aside a statutory demand

Counsel: “I seek orders to adjourn the wind-up hearing.” Judge: “On what grounds?” C: “I am instructed that the half year 2017 audit report won’t be ready until March 2018.” C: “Oh and my instructing solicitor signed an affidavit stating the reports will establish solvency.”  J: “It’s January. The parties agreed to the proceedings timetable in December. Why was this…

Some Illegal Phoenixing Numbers

Some interesting observations from Kelly O’Dwyer MP in her second reading speech this morning in relation to #phoenix activity. In introducing measures to require purchasers of new residential premises or subdivisions to remit GST on the purchase price directly to the ATO, Ms O’Dwyer remarked (according to ATO data in the past 5 years): –…

R&M reduction in notice requirements

According to a new Bill introduced into parliament this morning, Part 5 of the Corporations Act, as it relates to Receivers and Controllers, may be getting a small change. That change is said to save $1.8m in regulatory compliance costs. So what is the proposed change? Where Receivers and Controllers are appointed, the Company would no…