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An interesting Federal Court of Australia decision on 1 August 2018 effectively supports the recent September 2017 insolvency law reforms regarding the assignment of causes of action (Rambaldi v Meletis, in the matter of Karas (Bankrupt) [2018] FCA 791). The brief facts of the matter were: In 2013 a company was placed into liquidation. In…

Do we, and should we, extend “special licence” to those outstanding people, in particular our creative geniuses, who contribute in an extraordinary way to their field of interest but are nevertheless actually deeply flawed people. Of course, we are all flawed in some way, to some degree. For better or worse. But what if that…

(The cold remains of what began with a passionate start… Billy Joel) Two recent important decisions have clarified whether or not trust assets held by an insolvent corporate trustee should be distributed pursuant to the priority regime for unsecured creditors in the Corporations Act 2001 (Cth) [1]. On 28 February 2018 the Victorian Supreme Court…

A very recent report [i] from the Australian Securities & Investments Commission (“ASIC”), released on 4 July 2018, found that one in six credit card consumers (18.5%) is struggling with their credit card debt. At June 2017 there were over 14 million open credit card accounts in Australia with total outstanding balances of almost $45…

Purchasers of new residential property will be required to pay GST directly to the ATO from 1 July 2018. The legislation to introduce GST withholding on the settlement of new residential property purchases or subdivision of potential residential land passed both houses of parliament on 28 March 2018, received assent on 29 March 2018 and…

Crutch words (filler, fluff, weasel words): they are usually words dropped into sentences in order to give the speaker more time to think, fill a gap in a conversation or to emphasise a statement. Over time, they become unconscious verbal tics formed out of habit. They often add no meaning to a statement, and can…

A further twist in bankruptcy proceedings In Issue 40 (October 2017) of Sheridans’ View we noted the High Court of Australia’s reported decision in the matter of Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28 that the Court still needs to be satisfied that a debt is truly owed by the debtor…

Liquidity test or balance sheet test – that is the question? I contend that you should [almost] always start with the balance sheet. For many decades there has been a preponderance of judgments focusing on liquidity rather than net assets when assessing a company’s solvency. And that is not surprising when the legislation itself identifies the ability…

It has long been said that airlines only exist for the benefit of the aircraft manufacturers. This suggestion has been supported by an incessant flow of airline failures over the years. I include in that list those airlines that only survive on the basis of their Government shareholders covering their losses. Many years ago I was lucky…

You have just spent six months negotiating a difficult matter and finally agreed to settle. The lawyers draw up the settlement agreement and one of the clauses says that this is a full and final settlement of all matters between the parties. I’m sure all lawyers are taught to use this clause in Commercial Law 101. That would explain…

As a senior member of a busy specialist insolvency firm, I am a regular user of the insolvency legislation. Last year new legislation was implemented in the guise of insolvency law reform. Apparently it represented 10% of all Federal legislation passed that year. There is a lot of it. Last week I had to hunt down the meaning…

Two recent significant credit management developments offer the prospect of help and relief for business, especially small business, in the New Year: The Australian Taxation Office (ATO) reporting to registered Credit Reporting Bureaus (CRBs). Speedier payments from Federal Government agencies. Transparency of tax debt measure In its mid 2016-2017 Mid-Year Economic and Fiscal Outlook, the…