Linc Energy part 2

Breaking news #LincEnergy: QLD Court of Appeal has just ruled the State’s environmental rules do not trump a Liquidators power of disclaimer under the Corporations Act (“disclaimer rights”).

The Court ruled:

– although QLD’s environmental laws (eg Environmental Protection Orders (“EPO”)) are ‘potentially’ inconsistent** with disclaimer rights, the Court found the EPO provisions do not fall within the exemptions of ss 5G(11) and 9(1) Corporations Act; and

– the liabilities in this EPO “were liabilities in respect of the disclaimed property” as opposed to liabilities independent of the property held by Linc.

** typically, if an inconsistency exists between State and Federal laws, Federal prevails: s109 Constitution

What does this mean?

Compliance costs of the EPO’s will not take precedence over the liquidators fees/expenses, employee entitlements and other unsecured creditors.

… more to come

We now await an inevitable appeal to the High Court, and the Canadian Supreme Court decision (Wells Association v Grant Thornton). There are others.

Thanks to Nicholas Lindsay for the head’s up message yesterday.

ARITA – Australian Restructuring Insolvency & Turnaround Association

#SVVoidables

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