Failure to Submit Report as to Affairs of Company

FAILURE TO SUBMIT REPORT AS TO AFFAIRS (RATA) OF COMPANY AND COMPANY BOOKS TO LIQUIDATOR – Consequences To Directors, Company Secretaries and “Classes Of People” Failure to submit a RATA and company books to the liquidator or provisional liquidator, can lead to serious consequences under the Corporations Act 2001 (Cth) (“Act”)! Who is Responsible? Directors…

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Liquidators and administrators – are the assets of the company subject to a Quistclose Trust?

Take-home points A Quistclose trust arises where a creditor has lent money to a debtor for a particular purpose. In the event that the debtor uses the money for any other purpose, it may be considered to be held on trust for the creditor. Any inappropriately spent money may then be traced, and returned to…

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Unfair preference claims against secured creditors – more options for liquidators?

Take-home points Unfair preferences are liable to be set aside upon application by a liquidator of a company in external administration under sections 588FE of the Corporations Act 2001. Section 588FA of the Corporations Act 2001 defines an unfair preference as a transaction that that is entered into between a company and creditor and “results in…

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Liquidators: speak softly and carry a big stick

The famous US President Theodore Roosevelt once described his foreign policy as “speak softly, and carry a big stick”.  The same maxim can equally be applied to daunting task of effecting a company liquidation, while managing the competing interests of creditors, employees and directors. After the failure of a company, liquidators are often forced to…

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