Insolvency practices – Page 5 – ░░░ INSOLVENCY INTERFACE

Changes to code of conduct for liquidators and trustees

Checklists and guides, Corporate Insolvency, Ethics, Insolvency practices, Personal Bankruptcy, Regulation, Standards Comments Off

Sep 182013

In continuing to develop its Code of Professional Practice, the Insolvency Practitioners Association of Australia (IPAA) released a draft third edition on 6 September 2013.

The Code sets guidelines for the behaviour and practices of trustees appointed under the Bankruptcy Act and liquidators and other types of external administrators appointed under the Corporations Act.

The draft is open for comment until 27 September 2013, and the IPAA hopes that the new version will take effect from 1 January 2014.

Those invited by the IPAA to comment are “members, regulators, government agencies and other stakeholders” – which presumably includes financiers, creditors, insolvent debtors, company directors and shareholders. In fact, the IPAA’s announcement is headed “public consultation“.

The full text of the IPAA’s Explanatory Memorandum – which provides “an explanation of the major changes that have been made to the Code in the development of the third edition” – is reproduced below.

From: Kim Arnold (IPAA)
Date: 6 September 2013
Subject: Explanatory Memorandum Draft Third edition of the Code

Introduction

This document summarises the more significant changes to the Code and discusses the reasons for the changes. It also addresses some of the concerns arising out of the first round of consultation with the IPA’s Insolvency Specialist Working Group (ISWG), National Board and State Committees.

Disclosure of referrers (6.6)

A requirement has been added to the Code requiring a Practitioner to disclose the source of a referral in the DIRRI where the appointment follows a specific referral.

During the first round of consultation, concerns were raised about this new requirement, specifically around commercial sensitivity of this information and the impact this may have on the reputation of the referral source.

It is our view that the disclosure of the referral source of an appointment is important for the following reasons:

• Creditors have a right to know how the appointment came about and part of that process is who referred the appointment maker (directors, debtor) to the practitioner;

• It may be relevant to creditors if the referral source is subsequently engaged to provide services in the administration and subsequently paid by the administration;

• We have received numerous complaints about the practices of a number of referral agencies, however as their personnel are not members of the IPA (nor registered liquidators or registered trustees) we are unable to take any action in respect of these complaints. The disclosure of the referral source may assist the IPA in managing this industry issue.

Disclosure of remuneration pre-appointment (6.13)

A section has been added to the Code requiring Practitioners to provide certain information about remuneration to directors/debtor prior to a director/debtor appointment (not court or controller appointments). This is not a requirement to provide a quote or estimate, but if a quote or estimate is provided, it will need to be in writing.

We have received a number of complaints from directors stating that they were told one thing by a Practitioner prior to the appointment and the actual fees sought/drawn in the administration were completely different. As there is usually no documentary evidence regarding what was told to the director prior to the appointment, it is difficult for the Practitioner to be able to verify what information was provided. By providing information about remuneration in writing to the directors/debtor, the Practitioner will receive protection from misinterpretation and will be able to provide evidence of the information provided in the event of a subsequent complaint.

We have also received colloquial evidence from a practitioner that some practitioners are providing directors/debtors will very low fixed fee estimates in order to obtain appointments and subsequently charging remuneration at hourly rates and having that approved by creditors.

Practitioners will also be required to disclose any estimates or quotes provided to directors/debtors prior to appointment in the initial remuneration advice sent to creditors.

We have developed a template for use by Practitioners at 23.2.3

Disclosure of basis of and actual disbursements (15.3.2)

Although creditors do not have the right to approve disbursements, they do have the right to understand on what basis disbursements are recovered and the quantum of disbursements paid to the Practitioner’s firm.

To provide greater clarity to creditors on the basis on which internal disbursements (eg internal non-professional fee expenses) are recovered , Practitioners will be required to disclose the basis in the initial advice to creditors regarding remuneration. This requirement has been built into the template at 23.2.1.

To assist creditors with understanding what disbursements have actually been paid to the Practitioner, the following information must now be included in the remuneration approval report:

• general information on the different classes of disbursements;

• a declaration that the disbursements were necessary and proper;

• in relation to disbursements paid to the Firm, whether directly or in reimbursement of a payment to a third party:

– who the disbursement was paid to;

– what the disbursement was for;

– the quantity and rate (only for internal disbursements); and

– the amount paid; and

• details of the basis of any internal disbursements that will be charged to the Administration in the future (e.g. Page rate for photocopying done internally).

Note that payments direct to third parties by the Administration only need to be clearly included in the receipts and payments.

These requirements have been built into the report template at 23.2.2.

Payment of remuneration by secured creditors in non-controller appointments (15.5.5)

The Code now makes clear that any payments by secured creditors for the realisation of secured assets, in any appointments other than controller appointments, must be disclosed to the approving body and approved in the same way as other remuneration.

In our view, this is a codification of the law.

Section 449E in respect of VA is clear that an administrator is only entitled to remuneration as is determined by agreement with the COI, resolution of creditors or the Court.

Similarly, section 473 for liquidators states that the liquidator is entitled to receive such remuneration as is determined by agreement between the liquidator and COI, resolution of creditors or the Court.

In a bankruptcy, remuneration is fixed under section 162 by resolution of creditors or by the COI. A trustee may also make an application to the Inspector General. Under s 165, a trustee is not able to make an arrangement for receiving from any person any remuneration beyond the remuneration fixed in accordance with the Act.

In our view, it is clear that there is a statutory requirement for proper approval to be obtained to draw any remuneration in any such appointments.

There was resistance to this change to the Code in the first round of consultation. It has been suggested that the Practitioner would be acting as the agent of the secured creditor and thus acting outside the VA/liquidation/bankruptcy. In our view, acting as agent of the secured creditor would be a conflict that would prevent the continuation of the underlying insolvency appointment. ASIC has similar concerns regarding conflict issues.

Furthermore, we envisage that the administrator/liquidator/trustee would be using the ABN, GST registration and insurance coverage of the underlying administration.

The proper view, in our opinion, is that the VA/liquidator/trustee is selling those assets in their role as VA/liquidator/trustee and remitting the proceeds to the secured creditor (subject to any prior ranking creditor, for example section 561 in a liquidation). The VA/liquidator/trustee may withhold sufficient funds to meet the cost of selling those assets, but that money cannot actually be drawn as remuneration until approval is obtained from the approving body.

Identity of directors (20.2)

There is a new requirement in the Code for Practitioners to take appropriate steps to satisfy themselves of the identity of directors or a debtor prior to accepting an appointment where the appointment is being made by the directors or a debtor.

The requirement is to take appropriate steps, which means that the Practitioner should use professional judgement to determine what is appropriate in the circumstances.

This requirement is consistent with AFSA’s (previously ITSA) requirement to verify identity when lodging a debtor’s petition.

Joint appointments (20.3)

General guidance has been added to the Code stating that joint and several appointments:

• should be taken with the knowledge that all Appointees are equally responsible for all decisions made on joint and several appointments, and

• the firm should have in place policies and procedures to ensure that all appointees are knowledgeable about the conduct of the administration, even if one appointee is leading the conduct of the administration.

This is general guidance following a spate of disciplinary action against co-appointees that were not the lead appointee on the administration.

For the purpose of facilitating comment the IPAA has made this Explanatory Memorandum and the following documents publicly available free of charge from its website:

Draft third edition with all edits marked up
A comprehensive Edits List of all changes “made to the Code between the second and third editions”.
Draft “clean” third edition assuming all edits are accepted

To see the notice issued by the IPAA click HERE.

Liquidator likely to be banned for 5 years after Court inquiry

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Sep 032013

Melbourne liquidator Andrew Leonard Dunner is likely to be prohibited from being registered as a liquidator for 5 years, following a decision by the Federal Court in an action brought against him by the Australian Securities and Investments Commission (ASIC).

In a media release on 30 August 2013 ASIC said that:

“In handing down his reasons for judgment today, Justice Middleton found that Mr Dunner had failed to adequately investigate the circumstances and affairs of companies to which he was appointed and had inaccurately reported to ASIC and creditors.

“The Court also found that he had drawn remuneration in excess of $600,000 without appropriate approval or adequate supporting documentation. The Court considered it appropriate that he should repay that remuneration and have leave to apply to the Court for justification of an entitlement to recoup remuneration where appropriate. Justice Middleton found that Mr Dunner’s conduct indicated ‘…a systemic failure of administration and internal protocols, as well as (in a number of instances) extremely poor professional judgment. In this way, Mr Dunner has failed to satisfy the high standards of conduct required of his offices’.

“In finding that a banning period of 5 years was appropriate, Justice Middleton said:

‘Withdrawing a liquidator’s registration operates directly to protect the public from the work of the person. It also operates generally by deterring other liquidators from acting in a similar fashion. ASIC submitted – and I accept – that there is a compelling public interest in the maintenance of a system which recognises that registration as a liquidator is a privilege, the continuance of which is conditional upon diligent performance of its attendant duties.’

To see the ASIC media release, CLICK HERE.

To see Justice Middleton’s important 67 page report and judgment, CLICK HERE .

Case citation:

Australian Securities and Investments Commission v Dunner [2013] FCA 872.

Case catchwords:

CORPORATIONS – Corporations Act 2001 (Cth), ss 423, 499, 536 – Duties of liquidator – Duties of receiver – Court inquiry into defendant’s conduct as liquidator and receiver – Failure by defendant to investigate circumstances of companies to which he was appointed – Drawing remuneration without approval or adequate supporting documentation – Inaccurate reporting to ASIC and creditors regarding external administrations – Repayment of remuneration drawn without approval – Unfitness to remain registered as liquidator – Duration of prohibition order.

Too many liquidators failing to provide adequate disclosure to creditors on relationships

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Jul 242013

When the Australian Securities and Investments Commission (ASIC) released its report on supervision of registered liquidators it bemoaned the fact that its compliance checks had found a 10% increase in inadequate declarations, up from 46.9% in 2011 to 56.3% in 2012.

In the accompanying Media Release ASIC Commissioner John Price was fairly blunt:

“The increase in inadequate declarations concerns ASIC. Liquidators must make full disclosure to creditors when it comes to their independence. Given our guidance, and education programs through the Insolvency Practitioners Association of Australia (IPA), there is no good reason for such a failure rate.”

Under the Corporations Act 2001 liquidators and administrators (other than those appointed by the Court) are required to make written declarations to creditors concerning indemnities they have received and relationships they have, or have had, with certain defined “persons” within the preceding 24 months. Both declarations are to be made and sent to creditors before the first meeting of creditors is held. The Declaration of Relevant Relationships and Declaration of Indemnities are referred to collectively in the insolvency profession as a DIRRI.

An “inadequate” DIRRI is described in ASIC’s report (para 56) as one which:

(a) fails to disclose a relevant relationship in pre-appointment dealings and/or, where such a relevant relationship has been identified, adequately explain why it does not create a conflict of interest;

(b) fails to disclose all companies involved in appointments to a group of companies, and whether or not circumstances existed between the group entities that may give rise to a conflict and, if so, how the appointees would manage those issues; and/or

More detailed guidance on how to make sure a DIRRI is adequate was given to registered liquidators in an email sent to them on 28 June 2013 by Adrian Brown, leader of ASIC’s Insolvency Practitioners Team.

The email extract below is Mr Brown’s description of “seven key areas for improving the likelihood that your DIRRIs do comply with the law, relevant professional standards and the IPA’s Code of Professional Practice.”

“1. Disclose pre appointment dealings/advice

Provide meaningful information about the nature and extent of pre-appointment meetings (regardless of the nature of the meeting or dealing, be it face to face meetings, telephone discussions or email/ other electronic communications) with the company’s directors and any of their advisors.

2. Disclose relationships

Disclose all relevant relationships in accordance with the Act, professional standards and the IPA Code to ensure full disclosure and transparency. We suggest you consider:

· how the relevant relationship might impact your ability to act in the best interests of creditors; and

· whether there is a reasonable chance that creditors might consider that independence is, or appears to be, compromised by that relationship if it were to subsequently come to light.

3. Provide a reason why a relationship does not result in a conflict

Give a reason why you believe each relevant relationship does not result in a conflict of interest or duty. The reasons provided must be specific to the appointment and should not simply be a restatement of example reasons provided in the IPA Code.

Merely stating that a relationship will not affect your independence, or that you received no payment for pre-appointment advice or meetings, is NOT a “reason”.

4. Disclose when appointed to a group of companies

Where the appointment is to a number of companies in a group, the DIRRI should specifically refer to each company and cite a reason why you believe that multiple appointments will not result in a conflict of interest or duty.

You should also consider what steps you must take should you become aware of an actual or potential conflict after the appointment.

5. Disclose external administrations with common directors

Documented conflict checks undertaken pre-appointment should show if you or your firm acted, or continue to act, as external administrator of another company with the same or a common director where the appointment occurred within two years before the new appointment.

Where this occurs, the relationship should be disclosed together with the reason why you believe the new appointment will not result in a conflict of interest or duty.

6. Disclose indemnities and other up-front payments

Disclose full details of the nature and extent of all non-statutory indemnities and up-front payments. This should include stating whether there are any conditions governing the indemnity, including what the indemnity can be used for.

7. Review and sign the DIRRI

It is vital that you carefully review every DIRRI before signing it. All appointees must sign the DIRRI.”

ASIC’s message is taking a long time to get across to some liquidators …

Three years ago (May 2010) Mr Stefan Dopking, then ASIC’s leader of the Insolvency Practitioners & Liquidators Stakeholder Team, wrote to registered liquidators to reveal the findings of its compliance review of DIRRIs in 2009. What ASIC found then was strikingly similar to its findings in 2012, as this extract from Mr Dopking’s letter shows:

“The review identified a number of areas where we believe the adequacy of disclosure needs improvement. In particular, our general observations are that:

a large number of Declarations did not adequately disclose the nature of the relationships or provide adequate reasons to explain why the disclosed relationships did not result in a conflict of interest or duty;

Declarations did not clearly articulate whether the registered liquidator’s firm (i.e. partners or related bodies corporate) was included in the Declaration;

the majority of Declarations did not disclose the nature and extent of pre appointment meetings and advice;

prior or contemporaneous appointments as external administrators of other companies with common directors were not adequately disclosed in over 20 instances;

many Declarations did not provide sufficient information to adequately identify the party providing an indemnity or sufficiently disclose the nature and extent of the indemnity provided;

many Declarations were not signed by both joint and several appointees (ASIC is of the view that each appointee must consider whether any relevant relationships exist that require disclosure and the Corporations Act 2001 (‘the Act’) requires each appointee to sign the relevant Declarations); and

it was not evident from the minutes of the meeting of creditors in many cases that Declarations were tabled at the meeting of creditors as required by the Act3. Minutes of the meeting of creditors should evidence compliance with this statutory requirement.”

The law requiring liquidators to prepare DIRRIs for creditors came into effect in January 2008.

(End of post)

Are Official Liquidators funding the Court Liquidation scheme?

Assetless companies, Corporate Insolvency, Insolvency practices, Insolvency Statistics, Regulation Comments Off

May 142013

According to a recent study, the cost of being an official liquidator can be a bit rich.

“In respect of official liquidations generally, the survey showed that on an annual basis, insolvency practitioners are required to personally fund disbursements of $1.4 million and remuneration of $47.3 million in the conduct of their roles as Official Liquidators.”

This is one of findings in a research paper titled “An Analysis of Official Liquidations In Australia”, written by Amanda Phillips of Ferrier Hodgson, Sydney, and published on 13 May 2013 via the website of the Insolvency Practitioners Association of Australia (IPAA).

More detail of the estimates on annual remuneration and disbursements for official liquidations generally is shown in this table:

	Charge made/cost incurred (million dollars)	Recovered from company assets (million dollars)	Funded by Official Liquidators (million dollars)
Remuneration	55.6	8.3	47.3
Disbursements	1.9	.5	1.4

Another finding is that “based on the data provided by survey respondents, the average cost to administer an official liquidation is $17,475 over an average period of 7 to 12 months.”

Ms Phillips surveyed members of the IPAA. The survey covered official liquidations which commenced during the period 1 July 2011 to 30 September 2011. The paper says that “Sixteen Official Liquidators provided data in relation to 90 matters, which represented 10% of the total national official liquidations that commenced during the period 1 July 2011 to 30 September 2011.”

In addition to remuneration the paper reports on aspects of official liquidation including the nature of a typical official liquidation, the duration of appointments, an industry analysis, the turnover & size, the dividends to unsecured creditors and funding for Official Liquidators.

Ms Phillips was the 2012 winner of a scholarship from the Terry Taylor Scholarship fund administered by the IPAA. Her 33 page paper is available in pdf format from the IPAA site by clicking HERE.

Liquidator wins: Court finds that third party payment is an unfair preference

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Sep 062012

An insolvent company, Mortlake Hire Pty Ltd (Mortlake), owed a debt to the Australian Tax Office (ATO). A related company, Antqip Pty Ltd, paid $70,000 to the ATO in respect of Mortlake’s debt. The liquidator of Mortlake took legal action against the ATO to recover the $70,000 as an “unfair preference” under section 588FA of the Corporations Act. The ATO claimed the payment was not an “unfair preference” because it had come from Antqip and had resulted in one creditor (ATO) being substituted by another (Antqip). The Full Federal Court (on 31/8/2012) rejected the ATO’s argument and found in favour of the liquidator.

The case is Commissioner of Taxation v Kassem v Secatore [2012] FCAFC 124

For an excellent analysis of the case – which also addressed the ATO’s practice of unilaterally reallocating payments made by taxpayers of tax liabilities from one account (such as the integrated client account) to another (such as the superannuation guarantee account) – see this blogpost by Carrie Rome-Sievers, a commercial law barrister and insolvency specialist of Melbourne.

“Australian Insolvency Decisions” June 2012 edition

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Aug 062012

Complied by Michael Ennis. Michael developed an interest in insolvency case law, while a Deputy Registrar in Bankruptcy at the Federal Court of Australia and while undertaking various roles at the Insolvency Trustee Service Australia (ITSA). He has maintained this interest since retiring. If you would like to receive the Insolvency Decisions schedule direct, advise Michael of additional decisions, or share your observations, you may contact Michael direct on rmci53mje@spin.net.au. Michael’s comments appear in red text.

____________________________________________________________________________________

Bankruptcy Act – Prior to Date of Bankruptcy

Commonwealth Bank of Australia v Oswal [2012] FCA 772 (12 July 2012) BANKRUTPCY – debtor resident outside of Australia – substituted service of bankruptcy notice – service upon solicitors who are representing or have represented the debtor in other proceedings in Australia – whether leave to serve a bankruptcy notice out of Australia is required http://www.austlii.edu.au/au/cases/cth/FCA/2012/772.html

Westpac Banking Corporation v Cossar & Anor [2012] FMCA 602 (10 July 2012) BANKRUPTCY – Creditor’s Petition – whether respondent debtors’ proposed proceeding against supporting creditor warrants adjournment or constitutes other sufficient cause not to make a sequestration order – whether sufficient evidence that proposed proceedings will proceed without undue delay and are likely to be successful – this criteria not established on evidence before Court – sequestration order made http://www.austlii.edu.au/au/cases/cth/FMCA/2012/602.html

Rookharp Pty Ltd & Anor v Webb & Anor [2012] FMCA 607 (5 July 2012) BANKRUPTCY – Creditor’s petition – no appearance of debtors at hearing – no grounds of opposition – sequestration order made http://www.austlii.edu.au/au/cases/cth/FMCA/2012/607.html

Bankruptcy Act – following Date of Bankruptcy

Quickly & thoroughly review all estates transferred from another Trustee – Newman v Bain [2012] FMCA 629 (5 July 2012) BANKRUPTCY – Application for extension of time for election by trustee pursuant to s.60(3) of the Bankruptcy Act – matters relevant to exercise of discretion http://www.austlii.edu.au/au/cases/cth/FMCA/2012/629.html

One with the lot – Cooper v Mbuzi [2012] QSC 190 (17 July 2012) PROCEDURE – MISCELLANEOUS PROCEDURAL MATTERS – VEXATIOUS LITIGANTS AND PROCEEDINGS – where the respondent in this matter has had a vexatious proceeding order made against him– where the applicant in this matter is the respondent in a matter commenced by the current respondent before the vexatious proceeding order was made against the current respondent – whether the applicant should be granted leave to be added to the earlier vexatious litigant proceedings – whether the earlier order under the Vexatious Proceedings Act 2005 should be amended to stay the other proceeding brought by the respondent http://www.austlii.edu.au/au/cases/qld/QSC/2012/190.html

Bankruptcy was annulled 9 months after Sequestration Order made, but action continues – Phillip Segal & Anor v Max Christopher Donnelly & Ors [2012] NSWSC 833 (24 July 2012) Whether solicitor authorised by registered proprietors of property to conduct sale process on their behalf – whether emails between solicitor and plaintiffs evidence an intention to enter into binding contract – where one co-owner acted as agent for the purchasers – whether other co-owner entitled to reject offer made by plaintiffs for purchase of the Property http://www.austlii.edu.au/au/cases/nsw/NSWSC/2012/833.html

Maxwell-Smith v Hall & Anor [2012] NSWCA 205 (25 June 2012) PRACTICE AND PROCEDURE – application for pro bono assistance under UCPR 7.36 – where litigant had received assistance under a previous referral twice within preceding three years – determining whether interests of justice are in the applicant’s favour requires assessment of whether the appeal has reasonable prospects of success – prospects of success found to be insufficient – application refused
PRACTICE AND PROCEDURE – power to waive, postpone and remit fees under Civil Procedure Regulation 2005 reg 11 – power to be exercised by Registrar on separate application http://www.austlii.edu.au/au/cases/nsw/NSWCA/2012/205.html

Same mistake still being made!! – “…a search by an officer of the Deputy Commissioner in April 2012 did not reveal the 2010 Order because the search was made by entering only the first name and surname of Mr Russell which, due to the form of that search, did not reveal the 2010 Order” – Deputy Commissioner of Taxation v Russell [2012] FMCA 598 (9 July 2012) BANKRUPTCY – Annulment – whether second sequestration order ought to have been made http://www.austlii.edu.au/au/cases/cth/FMCA/2012/598.html

Unusual circumstance in which this application considered – it occurred during the transfer of the bankruptcy administration to a registered trustee in bankruptcy pursuant to s 181A of the Bankruptcy Act 1966 – given outcome of the FMCA matter above, should in-coming Trustee be ‘engaged’ by ITSA to manage the administration, till transfer confirmed? – Leader Computers Pty Ltd v Johnson [2012] FCA 716 (6 July 2012) BANKRUPTCY AND INSOLVENCY – application pursuant to s 58(3)(b) of Bankruptcy Act 1966 (Cth) for leave to proceed in actions in the District Court of South Australia against bankrupt for voidance of transfer of property – whether leave should be granted in absence of indication from trustee in bankruptcy as to whether application opposed – where urgency in leave being granted due to impending trial date for District Court actions. Held: It was appropriate to grant leave pursuant to s 58(3)(b) of the Act. http://www.austlii.edu.au/au/cases/cth/FCA/2012/716.html

Re s. 153B – Stewart v Grauby [2012] FCA 703 (2 July 2012) BANKRUPTCY AND INSOLVENCY – application under r 36.05 of the Federal Court Rules 2011 to extend time to appeal – order from Federal Magistrates Court of Australia dismissing application for annulment – whether time should be extended http://www.austlii.edu.au/au/cases/cth/FCA/2012/703.html

Sullivan v Macquarie Leasing Pty Ltd [2012] FMCA 601 (2 July 2012) BANKRUPTCY – Application to set aside substituted service orders and sequestration order of Registrars of the Federal Magistrates Court – where applicant concedes debts owed – where applicant provides no evidence of ability to repay debts – where applicant claims unaware of papers relating to bankruptcy – whether to set aside orders http://www.austlii.edu.au/au/cases/cth/FMCA/2012/601.html

The end (perhaps) of an interesting, long running series of hearings in this bankruptcy – Sheahan (Trustee) in the matter of Frost (Bankrupt) v Frost (No 4) [2012] FCA 708 (29 June 2012) http://www.austlii.edu.au/au/cases/cth/FCA/2012/708.html

One of two significant decision Bob referred to me – as Bob remarked: “The judgment at paras 143-145, succinctly details the operation of s.58(1)(b) & (6) and s.116(1) of the Bankruptcy Act, and confirms that unrealised divisible property remains vested in the bankrupt estate notwithstanding that the bankrupt has been discharged from bankruptcy” – Falloon v Madden; Madden v Madden [2012] NSWSC 652 (14 June 2012) TRUSTS – sole proprietor – resulting trust – beneficiary bankrupt at the time – joint tenants or tenants in common – payments for benefit deceased estate – occupation fee http://www.austlii.edu.au/au/cases/nsw/NSWSC/2012/652.html

The 2^nd from Bob – again I will include Bob’s worthy comment “So I would submit that the lesson to be learnt from this judgment is that when you are fully engaged in investigating a “suspect” transaction with a view to recovery a property etc, from time to time stand back and ask the question “ Is the investigation/legal action still going to bring money into the estate ?”” – Travaglini v Raccuia [2012] FCA 620 (14 June 2012) COSTS – application for leave to discontinue with no order as to costs – application of r 26.12(7) of the Federal Court Rules 2011 that the discontinuing party is liable for costs unless the Court is satisfied there is a good reason for ordering otherwise – whether parties acted reasonably in prosecuting and defending the proceeding Held: when applicant commenced proceeding there was a reasonably foreseeable risk that litigation would become futile – applicant should pay the respondents’ costs upon discontinuance http://www.austlii.edu.au/au/cases/cth/FCA/2012/620.html

Tarrant v Statewide Secured Investments Pty Ltd [2012] FCA 582 (6 June 2012) BANKRUPTCY – Appeal from sequestration order – where federal magistrate refused to adjourn creditor’s petition – federal magistrate allowed the creditor’s petition to be amended to correct judgment date and dispensed with service of the amended petition – federal magistrate refused to receive bankrupt’s evidence where bankrupt required for cross-examination on her affidavits but did not attend – whether grounds of appeal disclose any appealable error http://www.austlii.edu.au/au/cases/cth/FCA/2012/582.html

A ‘must read’ – the circumstances in which a S of A could be rejected by ITSA has not been considered by the Court as far as I’m aware – I wonder where these Orders would put the Offence provisions, if the answers are not answered accurately – Vince (Trustee), in the matter of Sopikiotis (Bankrupt) v Sopikiotis [2012] FCA 573 (1 June 2012) BANKRUPTCY – s 54(1) Bankruptcy Act 1966 (Cth) – whether document purporting to be a statement of affairs defective – whether bankrupt should be required to file a statement of affairs – order made http://www.austlii.edu.au/au/cases/cth/FCA/2012/573.html

Another matter deserving a good read & consideration – Weeden v Rambaldi [2012] FCA 552 (29 May 2012) BANKRUPTCY – whether notices of objection to discharge filed pursuant to s 149B of the Bankruptcy Act 1966 (Cth) valid – whether notices of contribution assessment made pursuant to s 139(1)(c) of the Bankruptcy Act valid – whether notices were invalid because made by a joint trustee acting alone – unanimous concurrence required for act of joint trustee – whether joint trustees were appointed or a sole trustee appointed by meeting of creditors – s 257 of Bankruptcy Act and presumption that minutes of meeting provide prima facie evidence of meeting – whether evidence of concurrence of joint trustees – whether s 306(1) of the Bankruptcy Act validates the act of a joint trustee acting alone, where the consent of other trustee is later given, in relation to the making and notification of an assessment pursuant to s 139W(1) of the Bankruptcy Act and in relation to the filing of an objection to discharge pursuant to s 149B of the Bankruptcy Act – whether a formal defect or irregularity within the meaning of s 306(1) http://www.austlii.edu.au/au/cases/cth/FCA/2012/552.html

I’m not quite sure what is going on here – also, the plaintiff, joint trustees, use subpoena rather that s. 77C Notice – Re estate of Mischel [2012] VSC 296 (13 June 2012) PRACTICE AND PROCEDURE – Objection to a subpoena – Whether the Commissioner has power to release documents pursuant to the Taxation Administration Act 1997 (Vic) – Sections 91, 93, 94, 95 considered http://www.austlii.edu.au/au/cases/vic/VSC/2012/296.html

Corporations – pre-appointment

TRINH OPTICAL YLLUSION PTY LTD v VAN [2012] SASC 125 (25 July 2012) Application to set aside a statutory demand – amount due under a trust – whether a debt for the purposes of the Corporations Act 2001 – creditor/beneficiary an eight year-old boy – statutory demand served on the instructions of his mother – whether mother had authority to do so http://www.austlii.edu.au/au/cases/sa/SASC/2012/125.html

Williams (as liquidator of Willahra Pty Ltd (in liq)) v Kim Management Pty Ltd [2012] QSC 143 (19 June 2012) CORPORATIONS – WINDING UP – CONDUCT AND INCIDENTS OF WINDING UP – LIQUIDATORS – where an application was made to set aside an order made pursuant to s 588FF(3)(b) of the Corporations Act – whether an order should be set aside as of right because a party affected by the order made was not given an opportunity to be heard on the s 588FF(3)(b) application – circumstances in which a shelf order can be made on an ex parte basis – where the plaintiff liquidator did not know that the defendant was a potential target of an application under s 588FF(1) – whether the plaintiff liquidator ought to have known that the defendant was a potential target of an application under s 588FF(1) and served the defendant – the standard expected of a party and its lawyers on an ex parte application – the duty to make proper inquiries before making an ex parte application http://www.austlii.edu.au/au/cases/qld/QSC/2012/143.html

GMW Group Pty Ltd (Receivers and Managers Appointed) (in liquidation) & ors v Michael Saadie in his own right and trading as GMW1 & ors [2012] QSC 140 (4 June 2012) PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – DEFAULT OF PLEADING – where the applicants apply for summary judgement against the respondents under r 374 of the Uniform Civil Procedure Rules 1999 – where the proceeding was commenced by originating application and pleadings were later ordered – where service and timing of service of the statement of claim on the second and third respondents within the required period is unclear – where the first respondent has filed a defence and the second and third respondents have filed no defence – where the respondents have not complied with a court order requiring them to file affidavits detailing their personal assets – whether the applicants have satisfactorily proven that the respondents have failed to take a step in the proceeding thus warranting summary judgment under r 374 http://www.austlii.edu.au/au/cases/qld/QSC/2012/140.html

Applicant became bankrupt subsequent to initial application – McElligott v Boyce & Ors [2012] QSC 189 (17 July 2012) PROCEDURE – JUDGMENTS AND ORDERS – AMENDING, VARYING AND SETTING ASIDE – where applicant seeks to set aside under r 667(2) of the Uniform Civil Procedure Rules an earlier order of the court for the winding up of a company on the basis of allegations of fraud – where earlier appeals against winding up order were dismissed – where the allegation of fraud was considered in the appeal – where the applicant is a bankrupt – whether the applicant has standing to bring the application – whether the applicant’s contentions are based on newly-discovered material http://www.austlii.edu.au/au/cases/qld/QSC/2012/189.html

Field Camp Services Pty Ltd v Green (No.3) [2012] FMCA 577 (6 July 2012) CONSUMER PROTECTION – Alleged misleading and deceptive conduct – hire of transportable accommodation and camp units. PRACTICE AND PROCEDURE – Failure to pay costs of earlier proceedings in other courts – statutory demand made – whether application to be dismissed or permanently stayed. COSTS – Failure to pay costs of earlier proceedings in this court and State courts – statutory demand made – whether application to be dismissed or permanently stayed http://www.austlii.edu.au/au/cases/cth/FMCA/2012/577.html

Deputy Commissioner of Taxation v Compumark Pty Ltd [2012] FCA 583 (5 June 2012) CORPORATIONS – application to wind up company in insolvency by reason of tax debt – court’s residual discretion in applications for winding up – test for reasonably arguable case to challenge the existence of a tax debt PRACTICE AND PROCEDURE – corporate respondent – leave to appear otherwise than by a lawyer – dispensing with r 4.01(2) of the Federal Court Rules 2011
EVIDENCE – “fullest and best” evidence principles http://www.austlii.edu.au/au/cases/cth/FCA/2012/583.html

Corporations – post appointment

Handberg & Anor v MIG Property Services Pty Ltd [2012] VSCA 126 (15 June 2012) PRACTICE AND PROCEDURE – Application for leave to appeal – Whether substantial injustice demonstrated http://www.austlii.edu.au/au/cases/vic/VSCA/2012/126.html

Mischel v Mischel Holdings Pty Ltd (in liq) [2012] VSC 292 (27 July 2012) CO-OWNERSHIP – Joint tenancy at law – whether tenancy in common in equity – whether consideration given for acquisition of share – severance of joint tenancy by agreement and by conduct – effect of death of joint tenant after exchange of contracts but before completion of sale of the subject land EQUITY – Maxims – Equity will not assist a volunteer http://www.austlii.edu.au/au/cases/vic/VSC/2012/292.html

Clarke & Ors v Great Southern Finance Pty Ltd & Ors [2012] VSC 312 (24 July 2012) COSTS – Privilege – Loss of privilege under s 124 Evidence Act 2008 (Vic) determined before trial – Plaintiffs successful. COSTS – Application by plaintiffs under s 1321 Corporations Act 2001 (Cth) to review decision of liquidators to assert joint privilege – application adjourned sine die without determination http://www.austlii.edu.au/au/cases/vic/VSC/2012/312.html

Clarke & Ors v Great Southern Finance Pty Ltd (in liq) & Ors (Ruling No 1) [2012] VSC 295 (29 June 2012) PRACTICE AND PROCEDURE – Application by Plaintiffs to amend statement of claim – whether proposed amendments are defective – whether prejudice is likely to be suffered if the application were to be allowed – application refused http://www.austlii.edu.au/au/cases/vic/VSC/2012/295.html

Re Traditional Values Management Ltd [2012] VSC 308 (19 July 2012) PRACTICE AND PROCEDURE – COSTS – Orders made without adjudication on the merits – Discussion of relevant principles – Costs order made http://www.austlii.edu.au/au/cases/vic/VSC/2012/308.html

Traditional Values Management Limited (in liq) v Taylor & Ors [2012] VSC 299 (10 July 2012) PRACTICE AND PROCEDURE – Consolidation of proceedings – Separate proceedings against directors and officers, auditors, accountants and unitholders in failed managed investment scheme – Supreme Court (General Civil Procedure) Rules 2005 (Vic), r 9.12 http://www.austlii.edu.au/au/cases/vic/VSC/2012/299.html

Hoddinott & Ors v Willmott Forests Limited (recs & liq apptd) (in liq) [2012] VSC 282 (27 June 2012) PRACTICE AND PROCEDURE – COSTS – Orders agreed without adjudication on the merits – Relevant principles for an award of costs in a compromised proceeding – Costs order made http://www.austlii.edu.au/au/cases/vic/VSC/2012/282.html

TNT Building Trades Pty Limited v Benelong Developments Pty Limited (administrators appointed) [2012] NSWSC 766 (9 July 2012) CORPORATIONS – Creditors’ meeting – Resolution of meeting – Corporations Act 2001 (Cth) s 600A(2)(a) – Application to set aside resolution of creditors’ meeting.
CORPORATIONS – Termination of deed of company arrangement – Whether deed should be terminated by Court – Interests of creditors of company as a whole – Whether winding up would allow more favourable outcome or better return to creditors than deed of company arrangement and whether deed of company arrangement would be contrary to the interests of or prejudicial to creditors as a whole http://www.austlii.edu.au/au/cases/nsw/NSWSC/2012/766.html

Fw: Napier Constructions Pty Ltd (Subject to DOCA)(Receivers & Managers Appointed) -v- Christopher Honey (in his capacity as Joint and Several Receiver and Manager of Napier Constructions Pty Ltd) [2012] NSWSC 762 (6 July 2012) CONTRACT – Construction of deed recording agreement as to the basis upon which a party would assist companies and their receivers in prosecuting proceedings against certain third parties – where another party (the bank) makes available funds to facilitate prosecution of proceedings and is owed money under secured facilities – construction of formula for the sharing of settlement proceeds (between the companies and the bank) where provision is capable of two meanings – construction of clauses providing for the taking into account of interest http://www.austlii.edu.au/au/cases/nsw/NSWSC/2012/762.html

St Hilliers Construction Pty Ltd (In Administration) -v- Fitzpatrick Investments Pty Ltd [2012] NSWSC 804 (2 July 2012) BUILDING AND CONSTRUCTION – where design and construct building contract requires provision by the contractor of bank guarantees as security for performance – where, upon satisfaction of certain conditions, the contractor is entitled to a reduction of the security – whether such conditions satisfied – whether, by taking possession of the works, the principal has exercised an election amounting to a waiver of its right to continue to keep the security http://www.austlii.edu.au/au/cases/nsw/NSWSC/2012/804.html

Management 3 Group Pty Ltd (In Liq) v Lenny’s Commercial Kitchens Pty Ltd (No 2) [2012] FCAFC 92 (25 June 2012) PRACTICE AND PROCEDURE – pre-judgment interest – date from which interest is to run – interest to run until judgment is entered – rate at which interest accrues – whether penalty interest rate or Reserve Bank of Australia cash rate plus 4% – Practice Note CM16 Pre-judgment Interest – Federal Court of Australia Act 1976 (Cth), ss 51A, 52 http://www.austlii.edu.au/au/cases/cth/FCAFC/2012/92.html

In the matter of KASH Aboriginal Corporation ICN 108 (Administrators Appointed) No 2 [2012] FCA 789 (27 July 2012) CORPORATIONS – Aboriginal Corporation – administrators seeking directions in respect of proposed loan and mortgage with associated entity – whether administrators personally liable for monies borrowed – potential liability of administrators in respect of workplace health and safety issues – proposal to borrow funds from related entity http://www.austlii.edu.au/au/cases/cth/FCA/2012/789.html

Roumanus v Orchard Holdings (NSW) Pty Limited (In Liq) [2012] FCA 775 (20 July 2012) CORPORATIONS –Whether the defendant corporation in liquidation should be held liable as the primary contravenor or, alternatively, as an accessory, in respect of misleading and deceptive conduct constituted by representations made by persons who occupied office as directors of the corporation in connection with the sale by one of those persons to others of shares in the corporation – whether causes of action out-of-time in any event – whether causes of action could be maintained pursuant to ss 52, 75B and 82 of the Trade rPractices Act 1974 (Cth) http://www.austlii.edu.au/au/cases/cth/FCA/2012/775.html

Australian Securities and Investments Commission v Storm Financial Limited (Receivers and Managers Appointed) (in liq) [2012] FCA 750 (16 July 2012) http://www.austlii.edu.au/au/cases/cth/FCA/2012/750.html

Australian Competition and Consumer Commission v ACN 135 183 372 (in liquidation) (formerly known as Energy Watch Pty Ltd) [2012] FCA 749 (13 July 2012) CONSUMER LAW – declaratory relief, penalties and costs – breach of ss 18(1), 29(1)(g) and 34 of the Australian Consumer Law, Schedule 2 to the Competition and Consumer Act 2010 (Cth) – misleading and deceptive conduct – false and misleading representations – in trade or commerce – multimedia mass advertising campaign – retail energy prices – energy brokering services – general and specific deterrence – consumer protection http://www.austlii.edu.au/au/cases/cth/FCA/2012/749.html

Carson, in the matter of Hastie Group Limited (No 3) [2012] FCA 719 (5 July 2012) CORPORATIONS – application for directions under s 447D of the Corporations Act 2001 (Cth) http://www.austlii.edu.au/au/cases/cth/FCA/2012/719.html

Australian Executor Trustees Ltd v Provident Capital Ltd (No 2) [2012] FCA 754 (3 July 2012) PRACTICE AND PROCEDURE – stay – principles applying to grant of a stay http://www.austlii.edu.au/au/cases/cth/FCA/2012/754.html

Smith in the matter of Actively Zoned Pty Ltd (in liq) [2012] FCA 605 (8 June 2012) http://www.austlii.edu.au/au/cases/cth/FCA/2012/605.html

Quikfund (Australia) Pty Ltd v Prosperity Group International Pty Limited (In Liquidation) [2012] FCA 603 (7 June 2012) CORPORATIONS – consideration of an application for leave to proceed to prosecute an appeal http://www.austlii.edu.au/au/cases/cth/FCA/2012/603.html

Hancock, in the matter of St Hilliers Construction Pty Limited (administrators appointed) [2012] FCA 602 (7 June 2012) CORPORATIONS – extension of time to convene a second meeting of creditors of a company in administration http://www.austlii.edu.au/au/cases/cth/FCA/2012/602.html

Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed) v Oswal (No 6) [2012] FCA 590 (7 June 2012) COSTS – security for costs application – compliance with a subpoena – whether the Court is empowered under the Federal Court Rules 2011 to award security for costs in advance for costs and expenses of a non-party who is subpoenaed by a party Held: a stranger to litigation should not be put to onerous expense in complying with a subpoena issued by a party not resident in the jurisdiction – that quantum of security should be reviewed and fixed by a Registrar http://www.austlii.edu.au/au/cases/cth/FCA/2012/590.html

Australian Competition and Consumer Commission v ACN 135 183 372 (Administrators Appointed) (formerly known as Energy Watch Pty Ltd) [2012] FCA 586 (1 June 2012) http://www.austlii.edu.au/au/cases/cth/FCA/2012/586.html

Moodie, in the matter of Gowinta Farms Pty Ltd (administrators appointed) [2012] FCA 578 (31 May 2012) CORPORATIONS – extension of time to convene a second meeting of creditors of company in administration http://www.austlii.edu.au/au/cases/cth/FCA/2012/578.html

An on-going matter – looking forward to seeing where it all ends up – MG Corrosion Consultants Pty Ltd v Gilmour [2012] FCA 568 (31 May 2012) CORPORATIONS – variation to freezing order http://www.austlii.edu.au/au/cases/cth/FCA/2012/568.html

Insolvency practitioners cleared to provide tax and BAS agent services

BAS, Corporate Insolvency, Insolvency practices, Personal Bankruptcy, Returns, Taxation Issues Comments Off

Jul 202012

Liquidators who provide a tax agent or BAS service to the company they are administering do not have to be registered as tax agents or BAS agents.

That is the ruling issued by the Tax Practitioners Board on 26 June 2012 in its Information Sheet TPB(1) 12/2012.

The same rule applies to most other types of insolvency practitioners appointed under the Corporations Act or the Bankruptcy Act.

CONDITIONS APPLY:

But the rule, or exemption, only applies to work done for the client after the insolvency practitioner’s appointment. During the pre-appointment period the ban on unregistered persons providing a tax agent service or a BAS service for a fee or reward will apply.

The insolvency practitioners exempted under the ruling are liquidators, provisional liquidators, company administrators, administrators of deeds of company arrangement, receivers, receivers and managers, and bankruptcy trustees.

But the exemption might not apply to insolvency practitioners who act as agents for mortgagees in possession. On one reading of the Information Sheet it seems that because such insolvency practitioners are not agents of the company (as are liquidators, administrators and receivers) then they might not be performing the tax/BAS agent services “in accordance with the duties and responsibilities of the insolvency practitioner under the terms of the relevant legislation” in a situation “analogous to that of a self-preparing entity”. (See paras. 20 and 21.)

The Information Sheet also addresses the situation where, during the post-appointment period, an insolvency practitioner “bring(s) in outside consultants such as accountants or bookkeepers to deal with the entity’s tax or BAS issues”. The Tax Practitioners Board says that such consultants would need to be registered.

In other words, the exemption only applies where the insolvency practitioners or his or her employees carry out the tax work.

To see the TPB Information Sheet CLICK HERE.

ASIC invites comment on use of its new power to wind up companies

ASIC, Corporate Insolvency, Employee Entitlements, GEERS, Insolvency Laws, Insolvency practices, Regulation, White collar crime Comments Off

Jul 182012

How should the public interest test be applied?

The Australian Securities and Investments Commission (ASIC) has released a consultation paper outlining how it intends to implement its new power to wind up companies.

Recent amendments to the Corporations Act have given ASIC the power to order the wind up a company in specific circumstances and appoint a liquidator. The Corporations Amendment (Phoenixing and Other Measures) Act 2012 amends the Corporations Act to add a new part to Chapter 5 – External Administrations. The new part (Part 5.4C) – which comprises new sections 489EA, 489EB and 489EC – gives ASIC the power to wind up companies in FOUR scenarios:

SCENARIO 1:

ASIC may order a winding up if:

(a)	the response to a return of particulars given to the company is at least 6 months late; and
(b)	the company has not lodged any other documents under this Act in the last 18 months; and
(c)	ASIC has reason to believe that the company is not carrying on business; and
(d)	ASIC has reason to believe that making the order is in the public interest.

SCENARIO 2:

ASIC may order a winding up if the company’s review fee in respect of a review date has not been paid in full at least 12 months after the due date for payment.

SCENARIO 3:

ASIC may order a winding up if

(a)	ASIC has reinstated the registration of the company under subsection 601AH(1) in the last 6 months; and
(b)	ASIC has reason to believe that making the order is in the public interest.

SCENARIO 4:

ASIC may order a winding up if

(a)	ASIC has reason to believe that the company is not carrying on business; and
(b)	at least 20 business days before making the order, ASIC gives to:
	(i)	the company; and
	(ii)	each director of the company;
	a notice:
	(iii)	stating ASIC’s intention to make the order; and
	(iv)	informing the company or the director, as the case may be, that the company or the director may, within 10 business days after the receipt of the notice, give ASIC a written objection to the making of the order; and
(c)	neither the company, nor any of its directors, has given ASIC such an objection within the time limit specified in the notice.

Comments on Consultation Paper 180 are due by Friday 10 August, 2012.

Click here to download Consultation Paper 180. (PDF format.)

The following is ASIC’s media release of 12 July 2012:

ASIC today released a consultation paper outlining how it intends to implement its new power to wind up abandoned companies under the Corporations Act 2001 (Corporations Act) to facilitate greater access to the General Employee Entitlements Redundancy Scheme (GEERS).

Consultation Paper 180 ASIC’s power to wind up abandoned companies outlines how ASIC intends to exercise this new power, and how it will prioritise matters for winding up

‘When using this power, our first consideration will be if an order to wind up the company would facilitate employee access to GEERS’, Commissioner John Price said.

GEERS is a scheme funded by the Australian Government to assist employees of companies that have gone into liquidation and who are owed certain employee entitlements. However, companies are sometimes abandoned by their directors without being put into liquidation. This has previously resulted in employees of the company who are owed employee entitlements being unable to access GEERS.

Consistent with the new law, ASIC is proposing to apply a public interest test when deciding whether to wind up a company. This public interest test will consider factors like the cost of winding up, the amount of outstanding employee entitlements and how many employees are affected.

‘ASIC needs to consider the broader public interest when deciding which abandoned companies with outstanding employee entitlements will be wound up’, Mr Price said.

ASIC is proposing not to reinstate companies that have already been deregistered in order to wind them up later. Among other reasons, there are already court processes in place to facilitate the reinstatement of a company where that is needed.

ASIC intends to commence using this new power to wind up abandoned companies in the final quarter of 2012.

Comments on Consultation Paper 180 ASIC’s power to wind up abandoned companies are due by Friday 10 August, 2012.

Background

One of the measures of the Australian Government’s Protecting Workers’ Entitlements Package (announced July 2010) is to assist employees of abandoned companies to access the General Employee Entitlements and Redundancy Scheme when they are owed certain employee entitlements.

When the employer is a corporation, it must be in liquidation before GEERS can assist an employee.

Amendments to the Corporations Act have given ASIC the power to wind up an abandoned company in specific circumstances.

ASIC may appoint a registered liquidator over a company when exercising its power to wind up an abandoned company.

All about the Report As To Affairs in corporate insolvency

ASIC, Corporate Insolvency, Insolvency Law, Insolvency practices, Regulation Comments Off

Jul 112012

The corporate regulator may not care much about it but liquidators do, and they want some changes made.

The Report as to Affairs (RATA) is a form which is prepared for the purpose of showing the financial position of a company at commencement of its entry into liquidation, controllership or administration.

Between November 2011 and March 2012, and with support from a scholarship administered by the Insolvency Practitioners Association of Australia (IPA), I carried out extensive research into the RATA, including a random survey of 105 official liquidators.

My research paper is now available from the IPA or from the Centre for Corporate Law and Securities Regulation.

Titled “An Appraisal of the Report as to Affairs”, the paper is a report on the written survey of official liquidators concerning the Report as to Affairs form and associated compliance issues. The report also examines the history and purpose of the Report as to Affairs, laws which impose duties to submit the form, and ideas for change.

The paper concludes with several recommendations and observations, including the following:

“This survey of liquidators has brought to light substantial criticisms and concerns about the RATA and a desire for change. It coincides with moves towards harmonisation of personal and corporate insolvency regulation, and with the start of the Personal Property Securities Act, which makes significant changes to priority rules for secured parties as well as introducing a new vocabulary. All this suggests that it’s time the RATA form was revisited and overhauled. The ASIC should make the RATA the subject of an inquiry through a Consultative Paper …. The ultimate aims of the consultation would be to produce a new or redesigned form, a Regulatory Guide to the form, and an information sheet for directors. The inquiry should consider, for example, what constitutes an acceptable standard for a RATA – i.e., when does a professed RATA qualify as a valid RATA – and how the receipt of a RATA that fails to meet that standard should be handled.”

Appended to the main research report is a supplement which reproduces verbatim all the ideas, suggestions and comments made by liquidators concerning what is wrong with the present RATA and how it could be improved.

Thanks to Professor Ian Ramsay, of Melbourne University, who is Director of the Centre for Corporate Law and Securities Regulation, the full research paper appears in SAI Global Corporate Law Bulletin No. 178. A copy of the paper (including the annexures) is available as one pdf file from http://cclsr.law.unimelb.edu.au/files/The_RATA_-_research_paper_-_Keenan_-_2012_-_IPA_TTS.pdf

A shortened version of the paper appears in the latest edition of the Australian Insolvency Journal , which is published by the IPA (see Volume 24 Number 2, pages 10 to 23). The link to that version is http://www.ipaa.com.au/default.asp?menuid=319&artid=1157

I am indebted to Michael Murray, Legal Director of the IPA, who vetted the research paper and edited the version that appears in the Australian Insolvency Journal. It was as a result of his enthusiasm and status in insolvency law circles that Professor Ian Ramsay took an interest in the paper and had it published by the Centre for Corporate Law and Securities Regulation. Michael has also forwarded the paper to the ASIC, ITSA and relevant government departments.

Location of ASIC website for publication of insolvency notices

ASIC, Corporate Insolvency, Insolvency Notices, Insolvency practices, Regulation Comments Off

Jul 042012

The new ASIC website to be used by liquidators and other insolvency practitioners, and which can be searched by the public free of charge, is located at https://insolvencynotices.asic.gov.au/

The name of the site is a little misleading, because not all the notices are about insolvent companies. Notices to do with solvent companies who have entered a members’ voluntary liquidation are also shown. Accordingly, caution needs to be shown when browsing or searching. For example, regardless of whether a company is undergoing a solvent liquidation or an insolvent liquidation, the Browse/Search Notices page of the website shows the Status of such companies as simply “In liquidation”. Even when a notice is Viewed, there is no obvious sign as to the type of liquidation the company is undergoing.

When browsing or searching the results can be filtered by Appointment Type. The types are Court Liquidation, Creditors’ Voluntary Liquidation, Deed of Company Arrangement, Deregistration, Members’ Voluntary Liquidation, Scheme of Arrangement, Voluntary Administration and Winding Up Application.

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