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No express exclusion of set-off in the newly announced phoenixing offences: a missed opportunity!?

Really disappointed to see that the Commonwealth Treasury didn’t run with my idea of excluding the set-off defence (per s553C) from the newly announced illegal phoenixing offences under the Corporations Act. It would solve so many issues if s553C(3) was introduced into the Corporations Act, which could say something along the lines of: “For the avoidance…

Setting off prefo’s – not again …

Breaking: Set-off (in 553C) applies to unfair preferences, according to Justice Markovic in the Federal Court proceedings handed down today. Her Honour was minded to just follow the Re Parker case and the Smith v Bone case, which allowed set-off. Her Honour did remark that the Liquidator’s submissions did not deal substantially with this issue, because, as was found…

Does BCISPA continue to apply after a liquidation?

Façade Treatment v Brookfield Multiflex [2016] VSCA is “plainly wrong” and “should not be followed” according to Justice Stevenson in His Honour’s single-court judgment handed down yesterday. The Façade case had held that the Building and Construction Industry Security of Payment Act (“BCISPA”) does not continue to apply once the subcontractor enters Liquidation. Yesterday’s case, called Seymour…

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…