On Monday 23 March 2020, the federal parliament passed the Coronavirus Economic Response Package Omnibus Act 2020 (Cth) implementing a range of urgent measures announced by the government on Sunday 22 March 2020.
Category: Insolvency & Reconstruction
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A collection of case studies and articles highlighting the latest in legal news.
- In a recent decision of the Supreme Court of Victoria, the Court held that an appeal under the new Insolvency Practice Rules against an insolvency practitioner’s determination on a proof of debt at a meeting of creditors is a hearing de novo (ie a fresh hearing) without any need for the appellant to identify error by the original decision-maker.
- When contracting with administrators or liquidators, counterparties need to be careful to ensure such contracts will give them enforceable rights.
- An administrator can enter into almost any contract and is personally liable for numerous categories of debts they may incur.
- A liquidator has only limited powers to enter into contracts on behalf of a company, and generally has no personal liability under such contacts.
- A liquidator is unable to apply for a judgment under the Building and Construction Industry Security of Payment Act 2002 (Vic) (SOPA).
- Where judgment under the SOPA was obtained by the contractor before it went into liquidation, and the principal asserts an offsetting claim, the Court will stay enforcement of the judgment pending a taking of accounts pursuant to section 553C of the Corporations Act.
- Ultimately, a liquidator will only be able to enforce payment of an amount actually shown to be owed under the construction contract, after a final reconciliation has occurred.
- Liquidators have the power to sell causes of action belonging to the company, or conferred on the liquidator by the Corporations Act 2001 (Cth) (Act).
- Selling instead of litigating causes of action can be a safer, surer and quicker path for a liquidator to realise value for creditors.
- However, there are certain important limitations on a liquidator’s power to sell causes of action.
Important insolvency reforms recently passed into law as a result of the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Act 2017 (Cth) (TLA Act).
Rigby Cooke Lawyers has appointed Senior Associate Katerina Poulakis to the team, boosting its litigation and dispute resolution credentials.