Liquidators and administrations – in a dispute about priority between creditors, when will a judgment creditor prevail over a secured creditor?

Generally, a secured creditor is entitled to stand outside the insolvency process and seek to have any secured property excluded from being used to satisfy the unsecured debts. In the case of a floating charge (a security interest held over a fund of changing assets), whether or not the asset is captured by the floating…

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When can a trustee in bankruptcy recover debts in a state court?

Often, it will be difficult for a trustee to determine where proceedings should be commenced in order to recover monies or property that form part of a bankrupt estate.  The differences in filing fees and the efficiency or procedure of different courts can also affect a trustee’s decision when considering the most cost-effective way to…

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Insolvency laws are changing

As part of the National Innovation and Science Agenda, the Government is proposing to reform existing insolvency laws. The Government’s aim is to encourage entrepreneurship and innovation by: • reducing the current default bankruptcy period from three years to one year, and • introducing a ‘safe harbour’ for company directors from personal liability where a…

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Unfair Preference Claim by Liquidator

Sections 588FA (1), 588FC and 588FE of the Corporations Act together prescribe the elements necessary for a liquidator to establish in order to be successful in a preference recovery action. It is useful to set out those provisions in full. Section 588FA (1) 588FA(1) [What is unfair preference] A transaction is an unfair preference given…

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