Allens

Insolvency & Restructuring

Our experienced Insolvency & Restructuring legal team regularly publishes articles and updates - the full list of publications appears below. Recent high-profile insolvencies have highlighted the need for all companies to be aware of their liabilities and responsibilities under the law. If you'd like to be notified when we add new insolvency & restructuring publications to the site, please go to our subscription page to sign up for email alerts or, alternatively, you can subscribe to our RSS feed.

You can also read about our track record in corporate insolvency & restructuring

For an overview of the most important cases and developments in this area, see our Insolvency law blog. This service will replace our Annual Review of Insolvency & Restructuring Law.

Insolvency & Restructuring Publications

  • Focus: High Court upholds Willmott decision - liquidators may disclaim leases

    5 December 2013

    The High Court has held that a liquidator may disclaim a lease that a company had granted to a tenant, leaving the tenant to prove for any loss in the winding up. This decision clarifies the scope of the liquidators' statutory power of disclaimer. It highlights risks for tenants and for financiers taking security over tenants' interests in leasehold property, and may have wider implications for parties relying on property rights against a company in liquidation. Partner Matthew Whittle and Senior Associate Rebecca Collins report on the decision and its potential implications.

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  • Focus: The Lehmans aftermath - using a scheme of arrangement to release third party claims

    4 October 2013

    The Federal Court recently made orders convening a meeting of creditors of Lehman Brothers Australia Limited (in liq) to consider a scheme of arrangement providing for the release of creditors' claims against the company's insurers. The case illustrates the use of schemes of arrangement as a flexible and effective way of implementing a broad settlement between creditors and interested third parties in the wake of a corporate collapse. Partner Chris Prestwich and Law Graduate Elise Ho report.

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  • Focus: Jumping the cross-border insolvency queue

    12 August 2013

    A recent Federal Court decision requiring all the Australian assets of an insolvent foreign company be paid to the Australian Taxation Office, rather than being remitted offshore to be distributed in the liquidation, has significant consequences for cross-border insolvency law and the collection of domestic tax debts from insolvent foreign companies. Partner Christopher Prestwich and Lawyer David Harris report.

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  • Focus: UK Supreme Court overturns controversial Nortel and Lehman decision

    1 August 2013

    The UK Supreme Court has overturned the contentious Court of Appeal decision holding that the Lehman companies were to treat financial contributions to a group pension scheme as expenses of the companies' administrations, ranking higher than debts to other creditors. The UK decision aligns with the Australian position on this issue, and benefits lenders to, and unsecured creditors of, UK companies. Partner Philip Blaxill, Senior Associate Alicia Salvo and Lawyer Amy Burton report on the decision and its implications.

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  • Focus: PPSA update: transitional security interests may be no protection

    9 July 2013

    The NSW Supreme Court has held that although the ownership interest of a lessor in certain motor vehicles leased to a company were 'transitional security interests', they were not temporarily 'perfected' and did not take priority over a subsequently-registered financier's general security interest. The decision also supports the proposition that when, under section 267 of the Personal Property Securities Act, an unperfected ownership security interest in goods vests in a company upon its entry into voluntary administration, the company holds those goods subject to any perfected security interest it has granted over those goods, such as under a lender's general security agreement. Partners John Warde and Karla Fraser, and Law Graduate Riley Downie report.

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  • Focus: Examinees out of the loop

    27 May 2013

    A recent decision of the Full Court of the Federal Court confirms that the Australian and Securities Investments Commission may authorise receivers as eligible to apply for examination summonses without giving the potential examinee an opportunity to be heard. Partner Philip Blaxill and Law Graduate Katherine Glossop report.

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  • Focus: Clarification on statutory demands

    18 March 2013

    A Western Australian Supreme Court of Appeal decision has clarified the law on statutory demands, holding that a statutory demand for a portion of a larger debt is permissible. Partner Philip Blaxill, Senior Associate Rebecca Collins and Lawyer Tom Langdon report.

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  • Focus: When can receivers resist inspection of company documents?

    26 February 2013

    Two recent decisions have considered the circumstances in which directors can inspect the books and records of a company in receivership, and the basis on which receivers can prevent this. Partner Philip Blaxill and Lawyer Aparna Nanayakkara report.

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  • Focus: The PPSA 12 months on

    19 February 2013

    With the midpoint of the two-year transition period under the Personal Property Securities Act having just passed, it is a good time to reflect on some issues that have come to light in the past 12 months. The Allens PPS team reports.

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  • Linklaters Insights: Business judgment standard applicable to sale of assets located in U.S. in a Chapter 15 case

    14 December 2012

    On November 16, 2012, the United States Bankruptcy Court for the District of Delaware issued an opinion in the Chapter 15 case of In re Elpida Memory, Inc. addressing which legal standard applied to the Bankruptcy Court’s review of an asset sale already approved by the court presiding over Elpida’s main reorganization proceeding in Japan.

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  • Focus: No special treatment for foreign insolvency recovery judgments in the UK

    1 November 2012

    No special rule exists for the enforcement of foreign judgments relating to insolvency proceedings, according to a UK Supreme Court ruling that has important implications for those dealing with the assets of an insolvency in the UK. Partner Michael Quinlan and Law Graduate Dana Beiglari report.

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  • Focus: Draft Tax determinations highlight tax obligations of agents and trustees

    8 October 2012

    Two long-awaited draft Tax Determinations released by the Australian Taxation Office highlight the obligations of insolvency practitioners, and others who act as an agent or trustee, to retain sufficient money to pay tax which is, or will become, payable on any income, profits or gains arising from their appointment. Partners Charles Armitage and Michael Quinlan and Senior Associate Joanne Langford report

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  • Focus: What does an ambiguously worded charge 'secure'?

    25 September 2012

    A recent Supreme Court of Western Australia decision suggests that when resolving ambiguities regarding which property is intended to be covered by a charge, the surrounding 'commercial circumstances' may be considered. If necessary, the court may rectify the wording of the charge document, even if the chargor company is under administration. Partner Philip Blaxill, Lawyer Scott Ivey and Research Assistant Emma Cundale report.

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  • Client Update: Lessons for lenders and directors from the Bell Group appeal decision

    20 September 2012

    The Western Australian Court of Appeal has handed down its 1024-page judgment in the Bell Group litigation, Australia's longest-running proceedings. The case arose out of an attempted work-out, in which a group of companies in financial difficulties gave security to banks in exchange for giving the borrower more time, and to avoid liquidation. More than a year later, liquidators were appointed to the companies and the banks enforced their security.

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  • Focus: Creditors' property sold despite PPS registration

    11 September 2012

    A recent Federal Court decision has permitted administrators of a large business group to dispose of certain unclaimed plant and equipment, even though it was registered on the Personal Property Securities Register. Partner Michael Quinlan (view CV) and Lawyer Shae Roberts report on what can happen when parties fail to adequately identify their secured property.

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  • Focus: No heads-up required for ASIC examination

    30 August 2012

    A recent Federal Court decision confirms that the Australian Securities and Investments Commission is not required to give notice to a potential examinee when it authorises receivers and managers to conduct an investigation of the examinable affairs of a company. Partner Michael Quinlan and Law Graduate Arlou Arteta report.

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  • Audio: The PPS Register - the first 6 months - traps and lessons for suppliers

    16 August 2012

    The PPS register has now been in operation for six months. Partner Diccon Loxton speaks to BRR Media about the lessons and traps for suppliers of goods on lease or retention of title terms

    Listen
  • Focus: High bar to restraining collection of tax

    16 July 2012

    A recent Supreme Court of New South Wales decision, dismissing an application to restrain the Office of State Revenue from recovering assessed taxes while the time to challenge the assessments was still running, confirms the courts' reluctance to interfere with the recovery of taxes. Partner Michael Quinlan and Lawyer Yu Zhang report

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  • Focus: Good news for receivers and administrators who act in good faith

    28 June 2012

    Australian administrators and receivers – and their lawyers – will gain confidence from a recent English decision that confirms no claim in tort can be brought against an administrator, as an agent, for procuring the company to which he or she has been appointed to act in breach of contract, provided the administrator has acted in good faith. Partner Michael Quinlan and Lawyer Joshua Busuttil report

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  • Focus: Examining 'the Body' of set-off law

    14 June 2012

    A recent High Court of Justice decision in the Isle of Man has held that an amount owed by a company acting as trustee and nominee of Elle Macpherson could not be set off with money owed to her personally. Partner Michael Quinlan and Lawyer Shae Roberts report on the case (based partly on Australian authority) that overturns a previous decision that set-off was available where a beneficial entitlement and beneficial liability for countervailing credits and debits corresponded

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  • Focus: Keeping the tax man at bay: winding up application adjourned for tax appeal

    29 May 2012

    A recent Federal Court decision granting an adjournment of a winding up application may indicate an increasing willingness by the courts to take into account the impact of a tax appeal on the ultimate financial viability of a company, even if it is insolvent. Partner Michael Quinlan and Law Graduate Arlou Arteta report

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  • Focus: Want to set aside a statutory demand? First try to settle or be prepared to explain yourself!

    15 May 2012

    The Federal Court has recently determined that a company applying to the Federal Court to set aside a statutory demand must file a 'genuine steps' statement. This means that the party must try to settle the dispute before bringing the application or explain why it has failed to do so. Partner Michael Quinlan and Lawyer David Harris report

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  • Focus: Some not so sour grapes. Maybe you can set-off more than you thought?

    9 May 2012

    A recent Victorian Supreme Court decision confirms that post-liquidation debts arising from pre-liquidation obligations can be set-off. Partner Michael Quinlan and Lawyer Amy Burton report

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  • Client Update: Landmark changes to discovery in the NSW Supreme Court

    1 May 2012

    In March of this year, the Supreme Court of New South Wales announced major changes to its approach to discovery that are likely to profoundly alter the conduct of commercial disputes in that court. On 30 April 2012, the Chief Justice and key judges of the court's Equity Division addressed practitioners to further explain and clarify aspects of the new appraoch. Partner Richard Harris and Lawyer Elnaz Nikibin report on the changes, some of the matters being emphasised by the court and some similar themes emerging in the Federal Court

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  • Focus: Receivers' examination powers upheld as constitutionally valid

    28 March 2012

    A recent WA Court of Appeal decision has affirmed the constitutional validity of a court's power to conduct public examinations of a corporation in receivership and where property of a corporation is in the possession of a mortgagee. Partner Philip Blaxill, Senior Associate Corey Steel and Law Graduate Miranda Cummings report on a case of interest to secured creditors and receivers across Australia

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  • Focus: Latest decision on shareholder causation

    22 March 2012

    The Full Federal Court has handed down judgment in the latest Australian appellate court decision to consider the standard of causation evidence necessary to establish a shareholder claim against a company - in this case, HIH - for misleading or deceptive conduct. Partner Duncan Travis and Senior Associate Jonathan Joseph report

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  • Focus: High Court gives guidance on farm debt mediation legislation

    21 March 2012

    A significant High Court judgment has provided clear guidance on the limitations imposed under New South Wales farm debt mediation legislation on lenders enforcing security over farms. Partner Andrew Boxall and Lawyer Marian Pond report

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  • Focus: 'Phoenixing' reforms introduced

    29 February 2012

    The Federal Government has introduced draft laws directed at companies that engage in 'phoenix'-related activity, including imposing liabilities on the directors of those companies. Partner Simon Dewberry, Special Counsel Luke Gattuso and Senior Associate Matthew McCarthy report

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  • Focus: When is a creditor not a creditor?

    21 February 2012

    Two recent NSW court decisions have shed light on which claims will be admissible against a company in external administration. Partner Michael Quinlan, Lawyer Mitch Riley and Summer Clerk Alistair Oakes report

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  • Focus: Proposed reforms to insolvency industry regulation

    19 December 2011

    The way the insolvency industry is regulated could be reformed under proposals contained in a Federal Government paper. The reform is aimed at promoting a high level of practitioner professionalism and competency, and increased efficiency in insolvency administration. Partner Michael Quinlan, Lawyer Laura Racky and Summer Clerk Nicole Meyer report

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  • Focus: Is it easier to bring proceedings against companies in administration?

    30 November 2011

    In a welcome development for anyone wanting to bring court proceedings against a company in administration, the NSW Supreme Court has lifted the statutory moratorium on proceedings against a company in administration to allow a plaintiff to enforce an arbitral award. It has also clarified its role in enforcing arbitral awards. Partner Michael Quinlan and Lawyer Jonathan Adamopoulos report

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  • Focus: Winding up foreign companies in Australia not so easy

    3 November 2011

    A recent Federal Court decision has provided important guidance for creditors of foreign companies who are considering using the special winding-up regime for foreign companies contained in the Corporations Act. Partner Michael Quinlan, and Lawyer David Harris report

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  • Focus: The Timbercorp class action cut down

    29 September 2011

    In a landmark decision, the Victorian Supreme Court recently dismissed a class action by Timbercorp investors following the collapse of the Timbercorp Group in April 2009. Partner Irene Trethowan and Lawyers Kate Austin and Brenton Pollard look at the decision, which further clarifies the disclosure obligations of companies when issuing product disclosure statements for financial products and is likely to have implications for investors involved in other managed investment scheme class actions

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  • Focus: Trusty liquidators not left out of pocket

    23 September 2011

    The Federal Court, in considering the collapse of the Great Southern group of companies, has reiterated that a trustee is entitled to be reimbursed or indemnified from the trust property for any expenses that have been properly incurred in the trust's management. Partner Michael Quinlan and Lawyer David Harris report

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  • Focus: UK Supreme Court enforces 'flip' clause

    12 September 2011

    The United Kingdom Supreme Court has held that a flip clause does not contravene the anti-deprivation principle under English bankruptcy law and this complements the position adopted by the High Court of Australia. Partner Michael Quinlan and Lawyer Sally Kirby report

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  • Focus: A 'privileged' life - receivers' legal professional privilege upheld in WA

    2 September 2011

    The Supreme Court of Western Australia has held that a receiver can assert legal professional privilege over solicitors' bills of costs incurred by them through their receivership. Partner Philip Blaxill, Senior Associate Corey Steel and Lawyer Stephen Olynyk look at a case that also indicates this privilege extends to the narrations contained within solicitors' bills of costs and receivers' charging schedules

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  • Focus: Liquidators can't sell company property subject to non-assignment clause

    11 August 2011

    The NSW Court of Appeal has held that a liquidator's power to sell company property does not extend to the sale or assignment of contractual rights that are subject to a non-assignment clause. This limitation also applies to receivers and voluntary administrators. Partner Michael Quinlan and Law Graduate Stephen Lloyd report

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  • Focus: Court approves a creditors' trust

    15 July 2011

    The NSW Supreme Court has recently authorised administrators to recommend a deed of company arrangement involving a creditors' trust to creditors, despite the Australian Securities and Investments Commission's published objections to these arrangements. Partner Michael Quinlan and Lawyer David Harris report

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  • Focus: When unfair preference must be repaid due to suspicion of insolvency

    24 June 2011

    The Victorian Supreme Court recently confirmed that a debtor's failure to pay its debts on time is, of itself, not a reasonable ground for a creditor to suspect the debtor's insolvency. Partner Michael Quinlan and Law Graduate Fiona Chung report

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  • Focus: No detailed explanation equals no guarantee

    16 June 2011

    It has recently been held that it would be unconscionable to allow a lender to enforce a guarantee against a borrower's wife, even though she was well-educated, not misinformed and understood the guarantee's general nature. Partner Michael Quinlan and Lawyer Stewart Webster report

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  • Focus: Opportunity to comment on insolvency profession reform

    10 June 2011

    The Federal Government has released an options paper that examines proposals on regulatory reform of Australia's insolvency profession. Partner Michael Quinlan, Lawyer Veronica Blanpain and Law Graduate Fiona Chung report on the proposals, which could affect practitioners' remuneration and disciplining processes, and expand creditors' powers.

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  • Focus: Scope of receiver's liability for 'other amounts' wound back

    6 June 2011

    A recent decision has wound back the scope of a receiver's liability for 'other amounts' and emphasised the need for alleged 'owners' of goods to prove their ownership. Partner Michael Quinlan and Lawyer Sally Kirby report

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  • Focus: One Tel - the danger of 'hastening slowly'

    18 May 2011

    The NSW Supreme Court has handed down a decision setting aside service of the statement of claim brought by the special purpose liquidator of One.Tel Limited (in liq) and dismissing the proceedings in their entirety. Partner Malcolm Stephens and Senior Associate Chris Prestwich report

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  • Focus: Good news for lenders - shadow directorship risks clarified

    12 May 2011

    Recent guidance from the New South Wales Court of Appeal on the hotly debated elements of shadow directorship is good news for secured lenders in workout situations who wish to impose conditions on their continued support for their borrowers. While there is still a fine line between permissible conduct and shadow directorship, the case suggests that conditions on loans and/or forbearance do not a shadow director make. Partner Michael Quinlan and Lawyer Amy Spira report

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  • Focus: Litigation funding decision impacts on insolvency practitioners

    2 May 2011

    The New South Wales Court of Appeal recently held, with significant implications for insolvency practitioners, that a litigation funding agreement constituted a 'financial product' and could be rescinded because the funder was not licensed to deal in 'financial products'. This follows the Full Federal Court's 2009 decision that litigation funding arrangements for class actions constitute 'managed investment schemes' (a particular type of 'financial product'). Partners Ross Drinnan and Michael Quinlan and Senior Associate Jenny Campbell report

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  • Focus: Recoverability of post-receivership costs

    21 April 2011

    A recent High Court of England and Wales decision has determined that costs incurred by a former court-appointed receiver after the receivership has ended can be recovered from receivership assets that are still subject to the former receiver's lien. Partner Michael Quinlan and Lawyer Mitch Riley report

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  • Focus: Court marshalls debt

    14 April 2011

    Mortgagees should be aware of a recent England and Wales High Court decision that considers the circumstances in which the 'equitable doctrine of marshalling' of debt will apply. The doctrine operates in the same way in Australia. Partner Michael Quinlan and Senior Associate Przemek Kucharski report.

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  • Focus: UK Supreme Court abolishes expert immunity

    5 April 2011

    A landmark decision recently handed down by the UK Supreme Court has found that there was no justification to continue to give expert witnesses immunity from being sued for negligence in relation to the evidence they give in court or the views that they express in anticipation of court proceedings. The court did not accept that potential liability would result in reluctance on the part of experts to accept instructions, nor would it prevent them from exercising their overriding duty to the court and acting with diligence and integrity. Partner Michael Quinlan Senior Associate Joanne Howie report

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  • Focus: Alinta Finance restructuring

    30 March 2011

    Schemes of arrangement are re-emerging as an effective tool for restructuring companies with unsustainable secured debt. The Supreme Court of New South Wales recently made orders approving four schemes of arrangement between companies in the Alinta Finance group and their scheme creditors which effected a restructure of secured debt owed by those entities and a transfer of the ownership of the companies in Alinta Finance group to a company owned by the lenders. Senior Associate Christopher Prestwich reports

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  • Focus: Enforceability of guarantee covenants - use it or lose it

    10 February 2011

    Lenders and landlords (and, in particular, anyone seeking to rely on a promise to obtain a guarantee of debt from a third party) should be aware of the recent New South Wales Court of Appeal decision that considered the enforceability of guarantee covenants and the circumstances in which an estoppel by representation will be found. Partner Michael Quinlan and Lawyer Madeleine Ellicott report

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