Regulation/Legislation

Bankrupt ex-liquidator wants trustees neutered

dVT Group co-founder Riad Tayeh iNO Opinion You can imagine it must have been difficult for ex-liquidator Riad Tayeh to resist contributing a few cents worth of hard won wisdom when the Federal Government invited individuals and organisations to suggest improvements to the bankruptcy regime. The doors were flung open for submissions in January 2021, which was only a month before a judge of the…


Power of attorney VA okayed by court

CrouchAmirbeaggi partner Shabnam Amirbeaggi. As our 25th Prime Minister John Winston Howard once said: “Context is everything” and context is uppermost in the reasoning of a judge of the NSW Supreme Court who recently validated an insolvency appointment made by a non-director exercising power of attorney. The need for judicial endorsement came about because the company’s husband and wife directors have in recent times been…


Orders in after first win for anti-phoenixing laws

PKF partner Glenn Franklin. PKF partner Petr Vrsecky. Following their historic win in the Supreme Court of Victoria last month, two PKF Melbourne partners have secured orders in respect of the court’s finding that a business sale agreement constituted a creditor-defeating disposition and an illegal phoenix transaction within the meanings of ss 588FDB and 588FE(6B) of the Corporations Act 2001. As many iNO readers will…


Pre-insolvency advisory fingered in phoenix judgment

PKF’s Petr Vrsecky. PKF partner Glenn Franklin. There was much hyperventilating last week after delivery of judgment in the matter of Intellicomms Pty Ltd (in liq) [2022] VSC 228 which record the first application of new laws aimed at combatting illegal phoenix activity. While it’s early days and the judgment could be overturned on appeal, few of the breathless commentators who explored this inaugural application…


Australian insolvency laws an “impenetrable quagmire”

Safe Harbour review panel chair Genevieve Sexton. Duff & Phelps-Kroll senior advisor Steve Parbery. The panel charged with reviewing the insolvent trading Safe Harbour provisions has called for a root and branch review of Australia’s insolvency laws, which it said are perceived by many even in the industry as an “an impenetrable quagmire that is scary, complex and unknown.” “Fundamental to such a review is…


Two Bobs and Trustees unite on trust assets

McGrathNicol’s Rob Kirman. McGrathNicol’s Rob Brauer. Questions of priority of entitlement to trust assets continue to vex even the most unflappable of insolvency practitioners and as a recent court judgment shows, even judicial eminences are wary of conclusive excess. In the matter of Francis (Trustee), in the matter of Fotios (Bankrupt) v Helios Corporation Pty Ltd [2022] FCA 199 Federal Court judge Craig Colvin explains…


Probuild VAs extend liability protections

Deloitte’s Sal Algeri. The challenges of identifying assets and liabilities of Probuild would have been apparent to the four Deloitte partners appointed voluntary administrators (VAs) of the stricken builder last month very early on. They or their staff have undertaken engagements of various sorts for Probuild entities going back more than two years and in the week prior to their formal appointment they met with…


Forge settlement fodder for ‘Improving Outcomes’ Bill

Banton Group CEO Amanda Banton. KPMG’s Martin Jones. If the Federal Government wanted a recent example of why the litigation funding industry should submit to the regulatory cosh as is envisaged in the Government’s Corporations Amendment (Improving Outcomes for Litigation Funding Participants) Bill 2021 then it might like to look at the latest update for creditors of the Forge Pooled Group (FPG). “The fact that…


Court delivers early Christmas with resounding “No”

Morton + Lee Insolvency’s Gavin Morton. “No”. With that one word Australia’s collective population of registered liquidators and insolvency specialists let out a resounding cheer, because it meant that the Full Bench of the Federal Court had decided not to ruin their Christmas. “The creditor claims to be entitled to set off its obligation under s 588FF of the Act to repay the preference received…


Deed administrator dirty as liquidator lassoes leave

Grocon Group deed administrator Craig Shepard. Hastie Group liquidator Craig Crosbie. There may well have been terse words, a chilling silence, or even diverse and inclusive profanity when KordaMentha’s Craig Shepard learned last week that Hastie Group liquidator Craig Crosbie had wrangled a decisive grant of leave. Shepherd – in his capacity as deed administrator of the Grocon Group – has been resisting efforts by…