Posts in Bankruptcy and Insolvency
Moving to the front of the queue: prioritising and enforcing an administrator’s right to remuneration in a company wind-up

An administrator appointed over a company is entitled to payment of his or her remuneration, expenses and costs incurred in carrying out the role. To that end, an administrator can be indemnified out of the company’s property and can hold a lien over that property to secure the indemnity if the company is subsequently wound up.

The Supreme Court has recently ruled on two questions arising from such a scenario: does the lien extend to all the company’s property, or only that which the administrator caused the company to hold? And where does the administrator’s indemnity rank with the company’s other debts?

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Going behind court judgments in bankruptcy proceedings: the High Court’s consideration

In Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28, the High Court has affirmed the position that a court’s discretion to go behind a judgment is not restricted to situations of fraud, collusion or a miscarriage of justice occurring at trial. In doing so, the majority was mindful of the importance of protecting in bankruptcy proceedings the interests of third parties — particularly other creditors — who do not participate in the trial and who later seek to rely on the bona fides of a judgment debt when a sequestration order is made.

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Enforcing an equitable charge against a bankrupt

The Full Court of the Federal Court has recently clarified the law regarding the ability of a secured creditor of a bankrupt estate to commence proceedings against the bankrupt pursuant to the Bankruptcy Act 1966 (Cth). In Morris Finance Ltd v Brown [2017] FCAFC 516 the Full Court considered the provisions of the Act and held that, as an exception to the general rule that a creditor requires leave of a court to bring a claim for a provable debt against a bankrupt, proceedings to enforce an equitable charge do not require leave.

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Setting aside a statutory demand — with proper material

When applying to set aside a statutory demand, one of the ways to do so is to show the existence of a ‘genuine offsetting claim’. The recent Federal Court decision in Gucce Holdings Pty Ltd v Bank of Queensland Limited illustrates a set-aside application made on such grounds, and is worth noting for the interface it has with the law of evidence and parties’ procedural obligations.

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