A collection of news and insights about our firm and developments in the law, finance and insolvency industries
Insolvency is the term that is used to describe the position of a company when it is unable to pay its debts as they become due and payable (section 95A of the Corporations Act 2001 (Cth)). It is interpreted by the Courts using what is known as the “cash-flow test”. If directors of a company […]
Abstract The principal ground that is available to a creditor to make an application to wind up a company in insolvency is that the company is insolvent. The Commonwealth government legislated to incorporate into the Corporations Act 2001 (Cth) presumptions of company insolvency upon the occurrence of particular events. The most widely utilised and effective event to prove company […]
Primer for directors of small-to-medium enterprises The liquidator needs to be well funded and have a potential defendant who is also well funded. The empirical evidence is astounding because it shows that very few cases are actually run and disgruntled creditors can’t do much about it (unless they want to put up the money for […]
In September 2017 Australia’s insolvent trading laws were significantly watered down by the introduction of a new safe harbour for directors. Ben Sewell of Sewell & Kettle Lawyers explains the significance of the new law. Discussion Includes The new safe harbour provisions The prohibition on insolvent trading Implementing a plan The hurdles to obtaining the […]
There are two circumstances where a liquidator can be voluntarily appointed by a company. Both of these appointments are made by special resolution of a company’s members and can be distinguished by the appointment to a solvent or insolvent company. A voluntary liquidator appointed to a solvent company is made when a company resolves for […]
Summary The writer’s view is that 95% of voluntary administrations fail to meet the stated objective of the regime, being saving goodwill value of insolvent businesses, saving jobs and repaying a decent percentage of unsecured creditor debts (in double digits). Unfortunately, there is no conclusive empirical evidence to prove or disprove this proposition. This blog […]
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