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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…

Household debt at 200% of income

I was recently interviewed by CANSTAR following the release by UBS of its Australian Banking Sector Update, which revealed that household debt (compared to disposable income) in Australia had hit 200%. Australia is currently 5th in the world with $2.46 trillion. Australia’s increasing trend in household debt is unsurprising though. Just look at the low wage…

NSW Liquor and Gaming and Wind-ups

Justice Black roasted the NSW Liquor and Gaming Authority in his 2 January 2018 judgement. “It would be a most unfortunate state of affairs if a statute provides that [a voluntary administration cannot occur], …, without the approval of the Authority, but the Authority will not promptly grant that approval.” He goes on: “it is…

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…

No set-off allowed #PPSR

Imagine Company A owes Company B $100k, and B owes A $50k. You’d expect the two companies could just set-off those debts so that A only had to pay $50k. However, what happens if B goes into Liquidation before A exercises its right to set-off? Further imagine that bank (“C”) is a secured creditor, having properly…