If you receive a letter from a liquidator demanding tens or even hundreds of thousands of dollars as part of a liquidation process, what do you do next?
In insolvency, a liquidator sometimes seeks to recover money from a creditor on the grounds that the creditor has received an ‘unfair preference’ in a payment from the debtor company. Here we explain how the ‘running account’ principle can be used by a creditor to push back against a liquidator’s claim of unfair preference.
In this article, we look at the power of liquidators to obtain a warrant for the search and seizure of company books and property.
What happens when a corporate trustee of a trading trust goes into liquidation? Here we look at the current state of the law and the uncertainty around the power of liquidators in this situation.
In this article, we look at the definition of ‘unfair preference’ claims — a mechanism used by liquidators to claw back some prior payments to creditors. We also look at the available defences for an unfair preference claim, and how the new ‘simplified liquidation’ procedure for small businesses deals with unfair preference claims.
Sometimes, no matter what a director has done to try and avoid a liquidation, it will loom on the horizon as the only option when a business is no longer viable. There is nothing left to do but to get out of the building before it sinks into an oozing puddle. But in that situation, directors still need to know: what things should they take on the way out or avoid doing?
The terms ‘liquidation’ and ‘winding up’, just like the terms ‘bankruptcy’, ‘tax office’ and ‘new season of Married at First Sight’, carry a degree of anxiety. But they shouldn’t. Liquidation, or the ‘winding up’ of a company, can happen for many different reasons: it does not necessarily mean that the business is broken beyond repair.
It has been evident for a long time that Australia’s ‘one-size-fits-all’ liquidation model is inappropriate for SMEs. This inadequacy has become particularly evident in the wake of the COVID-19 related economic turbulence.
The prohibition against insolvent trading is a duty of all company directors to prevent their company from trading (i.e. incurring debts) while insolvent. It is illegal for a director of a company to allow an insolvent company to continue to trade, while having reasonable grounds for suspecting insolvency. The consequences can be serious: read our guide to find out more.
Illegal phoenix activity — the ‘re-birth’ of a business in new corporate feathers to avoid its obligations — has been a major concern of regulators in Australia for the last 25 years. In this ultimate guide we explain everything you ever wanted (and didn’t want) to know about phoenix activity in Australia.
It is illegal for a director of a company to allow an insolvent company to continue to trade, while having reasonable grounds for suspecting insolvency. The consequences can be serious.
A receiver must be an independent and suitably qualified individual. This means, in nearly all cases, that the receiver must be a registered liquidator and satisfy a range of other requirements that apply to receivers.