Setting-off by trade debtors

Following on from my post yesterday:

A common frustration for insolvency practitioners and creditors occurs where a debtor owes money to a company in liquidation, but for various reasons (sometimes unreasonably) those monies cannot be realised for the benefit of creditors.

The debtor may raise liquidated damages, breach of contract, defects, etc … all of which may be set-off against this liability.

In many cases, Liquidators are powerless to challenge this right to set-off, because of (amongst other things):

– a lack of expertise in the minutia of that industry;

– a lack of access to the site, service or goods (debtors generally terminate contracts immediately upon an insolvency event);

– insufficient funds; and/or

– lack of books or records.

My post yesterday attempted to explain why this situation may no longer be allowed, assuming an AllPAAP exists.

A story appeared in the #Australian this week, regarding a $70m court case between the Liquidators (PPB) and 18 debtors of the failed #HastieGroup.

It is my understanding that the Liquidators will be relying upon the Hamersley Iron decision (per yesterday’s post).

#Multiplex has been asked to act as contradictor in the case. 

This is going to be a very important case to follow in 2018.

#SVVoidables

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