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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A guide to recovery of director related payments by liquidators

The Road to Recovery Upon the winding up of a company, a liquidator will often be faced with the task of recovering payments to directors or director-related entities.  Especially where a company has a sole director or is a family business, these payments can often be confusing to characterise and may appear to have no…

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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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Investigating proof of debts and going behind court judgments

When can a liquidator (or trustee in bankruptcy) reject a proof of debt? In dealing with distressed companies and estates, liquidators and trustees are faced with competing claims and a limited number of assets in which to meet those competing claims. The situation is further complicated by the increasing costs involved in administering the estate…

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