Insolvency & Restructuring

By Jeffrey Brown

3.            What is the billing model that works for my business?  Whilst a commission based model has the obvious attraction of not involving any up-front payment, it does have its drawbacks.  You will usually end up paying more, particularly if  the debt is recovered quickly.  This is because most commission models operate on a percentage of money recovered.  The right debt collection service will be transparent about its costings, and offer flexibility in its billing that responds to your businesses  cashflow and financial management. [...]  READ MORE →

According to the Australian Competition and Consumer Commission, over 500 businesses offer debt collection services in Australia.  How on earth can you find the right one to collect your businesses debts?  It’s worth asking yourself a few questions before you make a choice:

1. What am I looking for a debt collection service to do that I can’t do myself?  Businesses outsource the collection of debts for all sorts of reasons.  Very commonly, businesses have already made attempts to collect from a customer and have reached a dead end.  Chasing debts is time consuming and often frustrating.  In house staff can’t be expected to know the full extent of your legal rights and responsibilities when seeking recovery of debts.  The right debt collection service will seamlessly take those headaches away from you.

2. Do my businesses debtors all fit the same mould?  Customers with a relatively small, one-off debt should be approached very differently to a long term valued customer who you hope will continue doing business with you after the debt is paid.  Similarly, collecting a debt owed by a small business presents different challenges to a debt owed by a large company.  The right debt collection service should offer a range of solutions and tailor their approach to each situation. [...]  READ MORE →

By Darrin Mitchell, Senior Associate at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

Are you crazy?  In the midst of litigation and you knock back full payment?  Yes that’s exactly what happened and with the approval of the Supreme Court of New South Wales.

Section 465B of the Corporations Act 2001 allows for the substitution of applicants in a winding up proceeding if the current applicant is not pursuing the application “diligently enough” or for the catch all provision “for some other reason”. [...]  READ MORE →

By Hayley Hitch, Paralegal of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

A difficult decision for a trustee to make is whether to allow a bankrupt to travel overseas during the bankruptcy period. Based on human emotion, sympathy may be the response to a request by a bankrupt to visit an unwell family member in another country. But on the other hand, a trustee has a duty to the creditors of the bankrupt estate to ensure that the bankrupt is not a flight risk and does not skip the country in order to evade their bankruptcy obligations. [...]  READ MORE →

By Hayley Hitch, Paralegal and Stephen Mullette, Principal, of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

ASIC has conducted a recent webinar in July 2016 in which it has announced its ongoing commitment to the supervision of registered liquidators in Australia, focussing on “independence, competence and improper gain”. In addition it has reminded the industry of its vision to hold registered liquidators, “as gatekeepers, to account”.

ASIC advised they are using their surveillance powers to take proactive and reactive action (which just about covers the field!) to remove poor performing liquidators. ASIC is endeavouring to create public trust and confidence in the insolvency market with respect to the conduct of liquidations and returns to creditors. [...]  READ MORE →

By Stephen Mullette, a Principal of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

Trust issues arise in insolvency on a frequent basis. Perhaps not in the ordinary sense, but rather when interested parties assert that property in the name of a bankrupt or insolvent company is in fact held on trust, for someone else, and therefore is beyond the reach of the insolvency practitioner.

A recent example in the Supreme Court of South Australia demonstrates the relevant principles which will apply to the assessment by a court of an alleged trust arrangement. In Athanasas, the Supreme Court of South Australia considered in a property purchased by parents (as to 50%) and a son (as to the remaining 50%) circumstances where the parents had provided the total purchase price, and the son had subsequently become bankrupt. The trustee in bankruptcy relied upon the registration of the property in the bankrupt’s name and sought orders for the sale of the property. The parents asserted that the property was held by their son, on trust for them, in particular since they had provided the complete purchase price, and the son had contributed nothing. [...]  READ MORE →

In April 2016, the Federal Government released a Proposals Paper, Improving Bankruptcy and Insolvency Laws. This was under the banner of the National Innovation and Science Agenda. The Proposals Paper recommends that there be a reduction in the current default bankruptcy period from 3 years, to 1 year.  This is because, it is suggested, Australia’s entrepreneur’s are being stifled and curtailed in their quest to succeed, by the stigma and longevity of bankruptcy (among other restrictions). [...]  READ MORE →

Indemnity …. costs – consider your offer terms

By Georgina King, Senior Associate, Insolvency, Restructuring & Debt Recovery Group

Normally, a successful litigant will recover only part of their costs. In exceptional cases, a court will award costs on an indemnity basis. Despite the name this is not a complete indemnity, but is a significantly higher proportion of the costs than is normally recoverable. The usual basis for seeking indemnity costs is to show that at an earlier stage of the matter the party offered to settle the proceedings on terms which would have been more favourable to the unsuccessful party than the final result ordered by the Court. [...]  READ MORE →

By Andrew Ng, Associate, Insolvency and Restructuring Group

In the matter of Aquaqueen International Pty Limited [2016] NSWSC 508

In April this year, the Supreme Court of NSW was asked to consider the Court’s inherent jurisdiction to enforce judgments (also referred to as equitable execution) in the matter of Aquaqueen International Pty Limited [2016] NSWSC 508. The principle underpinning equitable execution is to enable judgments to be enforced in circumstances where the legal remedies available to a judgment creditor are inadequate. [...]  READ MORE →

Under the Personal Property and Securities Act 2009 (Cth) (“PPSA”), if a PPS lease is not registered and a lessee goes into liquidation, the lessor will lose their interest in the property that is the subject of the lease. If a lease is not registered there is however some hope for lessors, as they may be able to prove that the lease is not a PPS lease and that they should retain the interest in their property. The recent Supreme Court of New South Wales decision of Forge Group Pty Limited (in Liquidation (receivers and managers appointed) v General Electric International Inc [2016] NSWSC 52, has helped to clarify the meaning of what a PPS lease actually is. This decision has provided an explanation as to what tests the courts will apply, in order to determine whether or not a particular lease will be defined as a PPS lease under the PPSA. [...]  READ MORE →

The National Consumer Credit Protection Act 2009 (which includes the National Credit Code) requires persons to hold a credit licence to engage in credit activities such as the provision of loans. In relation to small loans or “pay day” loans, the National Credit Act provides protection to consumers to reduce the risk of falling into debt. In particular, where a small amount loan is entered into (i.e. amount borrowed is $2,000 or less and term is between 16 days and 1 year) the credit provider must not charge interest in excess of the interest permitted under the National Credit Act. [...]  READ MORE →

Amendments to the Bankruptcy Regulations could see details of debt agreements appear on the National Personal Insolvency Index for a limited time only.

The National Personal Insolvency Index (NPII) is and has always been, until now, a permanent record of all formal personal insolvency proceedings. According to the Australian Financial Security Authority it contains records since august 1928. However, in response to amendments regarding retention periods for credit information and personal insolvency information as found in the Privacy Amendment (Enhancing Privacy Protection) Act 2012 (Cth), the Government has undertaken a review of Part IX of the Bankruptcy Act 1966 (Cth) (“the Act”). The review is likely to result in amendments to the Bankruptcy Regulations which will see information published on the NPII subject to limitation periods. [...]  READ MORE →