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Assignments Between Family Members: An Issue For Insolvency Practitioners

The Supreme Court of Victoria’s decision in AAD Services Pty Ltd (in liq) v ALD Wholesale Pty Ltd and Ors (No 3) [2019] VSC 546 highlights the issues that insolvency practitioners can face in regards to recouping funds. On these facts, an assignment created between family members had legal operation and meant that the trustee in bankruptcy was unable to access proceeds of judgment.

Why The Term ‘Legal Phoenix’ Is An Oxymoron

The Federal Court of Australia’s decision in ACN 093 117 323 Pty Ltd (In Liq) v Interlara Engineering Consultants Pty Ltd (In Liq) [2019] FCA 1489, is of great interest to restructuring and insolvency practitioners. Interlara Pty Ltd had attempted to restructure its business to move priority creditors to a new entity, so ensuring that upon winding up creditors with personal guarantees against Interlara’s directors were paid out. In holding the scheme to be an uncommercial transaction, an insolvent transaction, an unreasonable director related transaction and a voidable transaction, the decision of Derrington J highlights how the Court will treat the phoenixing of a company aimed at defeating the rights of priority creditors.

Franchising Taskforce Releases Regulation Impact Statement

On Monday 11 November 2019, the Franchising Taskforce released its Regulation Impact Statement (RIS).  The purpose of the RIS is to obtain stakeholder views and collect information and data about the relative costs and benefits of the various options to address some of the issues identified by the Parliamentary Joint Committee on Corporations and Financial Services in its Fairness in Franchising report.

Ultra Tune Appeal Decision

According to the ACCC’s media release of 23 September 2019, the Full Federal Court has “confirmed important franchisor obligations”, including upholding the Federal Court’s previous findings that Ultra Tune had breached the Franchising Code of Conduct. Despite reducing the total penalties imposed against Ultra Tune and ordering the ACCC to pay 60% of Ultra Tune’s costs of the appeal, the judgement has in the main vindicated the ACCC’s initial action against Ultra Tune and affirmed that franchisors must take great care to comply with their obligations under the Code.