Helped, or hamstrung? (The rise of Debt Agreements)
Debt agreements are at an all time high. Figures released by AFSA for the March quarter 2017 show that debt agreements are the highest on record at 3,584 for the quarter. Debt agreements reached record highs in Western Australia, Victoria, Queensland and South Australia. At the same time, we have seen the burgeoning of…
Catch Me If You Can (the con game)
Catch Me If You Can is a 2002 American biographical film based on the life of Frank Abagnale, who before his 19th birthday pocketed millions of dollars posing as a Pan American World Airways pilot, a Georgia doctor and a Louisiana parish prosecutor. Played by Leonardo DiCaprio in the film, Abagnale’s primary scam was cheque…
To make matters worse……
(recent exacerbation of an old problem) Bankruptcy/CGT liability An individual can face a second bankruptcy as a result of a first bankruptcy that involves an investment property or other CGT assets. An individual’s CGT asset vests in a trustee because of the bankruptcy of the individual. However, no CGT event happens as a result of…
Safe harbour on the horizon
Last week, on 28 March 2017, the Treasury released draft legislation to amend the Corporations Act 2001 to reform Australia’s insolvency laws as part of its National Innovation and Science Agenda (NISA). The aim of the reform is “to promote a culture of entrepreneurship and innovation and help reduce the stigma associated with business failure.”…
Can we ban the damn scam
Last month I received a random email that was the equivalent of the hackneyed, ridiculed and scorned Nigerian letter. An overseas bank manager had US$31 million in an account belonging to his client who had died and had ‘almost’ the same name as me. The manager wanted to ensure I got the money. Do such…
Litigation Forges on
Forge Group Limited (“Forge”) collapsed in February 2014 due to losses on two power station construction projects. Creditors were owed an estimated $800 million and more than 1,500 employees were left jobless. The collapse has generated legal actions that have produced noteworthy decisions. The most recent is the Federal Court’s ruling on 1 March 2017…
Rob the builder, can we fix it?
The start of the year saw builder Builton Group (Platinum Homes and Aspireon Homes) go into administration (owing about $16 million to 350 unsecured creditors, mainly subcontractors), adding to a growing list of WA residential builders and subcontractors that have recently crumbled. One of Builton’s creditors, Anstey Cabinets, was owed $1 million. The effect on…
The unceremonious disrobing of the fashion industry
The technology disruption in the retail sector that has been underway for several years now has seen some high profile casualties in the fashion sector. The toppling of Payless Shoes and Pumpkin Patch has now been followed by the voluntary administration of Marcs, David Lawrence, Herringbone and Rhodes & Beckett. Those major fashion merchants who…
Liquidator’s examinations (Section 596A of the Corporations Act)
The weird and wonderful claims the Courts are presented with. On 10 November 2016 the High Court unanimously dismissed Clive Palmer’s challenge to the constitutional validity of Section 596A of the Corporations Act (liquidator’s power to publicly examine and compel the production of documents). Palmer, who once declared himself Australia’s next prime minister, halted a…
Turn off for Christmas
Are you a “Smombie”? Or do you suffer from Nomophobia? Maybe it’s time to have a break this Christmas. A smombie is a walking person using a smart or mobile phone, and not paying attention as they walk. Seven out of ten young adults aged up to 24 admit using their mobile phones while walking,…
Migrated security interests – No protection after 31 January 2017
The two-year transitional period under the PPSA ended on 31 January 2014. This transitional period gave parties a two-year grace period to register interests created prior to the commencement of the PPSA that are considered security interests under the PPSA but which were not registrable under prior law, termed “transitional security interests”. Transitional security interests…
Retention of Title (‘ROT’) clause defence to unfair preference claim
In a recent case the Judge clearly reasoned that an ROT clause will provide a valid defence to a liquidator’s unfair preference claim in relation to a payment that reduces the debt to which the ROT clause relates. In Hussain v CSR Building Products Limited, in the matter of FPJ Group Pty Ltd (In Liquidation)…