News

Directors’ Obligations to Furnish Information to Administrators

On 30 July 2020, the Federal Court of Australia (‘Federal Court’) issued orders In the matter of Union Standard International Group Pty Ltd (Administrators Appointed) (No 2) [2020] FCA 1111, restraining the director of a company in voluntary administration from handling company information that was requested by the Administrators. This case serves as a reminder to companies in administration to ensure full compliance with reasonable information requests from administrators while also demonstrating the complexities in document management and the risks improper data handling can have on the work of administrators.

Can a payment made by a related third-party be an unfair preference?

On 5 August 2020 the Victorian Court of Appeal handed down its judgment in Cant & Anor v Mad Brothers Earthmoving Pty Ltd [2020] VSCA 198. In this case, the liquidator of Eliana Construction and Developing Group, Mr Cant, was pursuing Mad Brothers Earthmoving Pty Ltd for an alleged unfair preference. A related company to Eliana had paid $220,000 to Mad Brothers in satisfaction of Eliana’s debt. The Court of Appeal, in finding that the transaction was not an unfair preference as it did not come ‘from the company’ provides useful guidance on how to deal with a third-party paying the debt of an insolvent company. The decision touches on the operation of the good faith defence to voidable transactions contained in the Corporations Act 2001 (Cth).

Salvaging an Insolvency when the Liquidator was Invalidly Appointed

The recent decision of the Victorian Supreme Court, In the Matter of Polat Enterprises Pty Ltd (in liq) [2020] VSC 485, is a compelling reminder of the consequences of an invalid resolution for winding up a company. This case illustrates the challenges raised by an invalid appointment of liquidators, but also demonstrates the powers of the Court to provide orders that allow the liquidation to continue where considered appropriate.

Can a Court Order Threaten Access to a Liquidator’s Right of Indemnity?

13 Jul 2020

By Alicia Hill, Principal and Nicholas Mason, Law Clerk This article considers a decision of the Queensland Supreme Court handed down in February 2020. In Park & Anor v Whyte [2020] QSC 18, the Court considered the impact court orders may have to restrict a liquidator’s recourse to indemnification against the expense of defending third-party…