Wednesday, 15 March 2017

Proposed changes to PPS lease definition

On 1 March 2017 the Federal Government introduced the Personal Property Securities Amendment (PPS Leases) Bill 2017 into parliament, which, if passed, will amend section 13 of the Personal Property Securities Act 2009 (Cth) (PPSA) to:
  • replace the current one year threshold for deeming a commercial lease or bailment to be a PPS lease to two years, and
  • remove the much criticised ‘indefinite term’ category of PPS lease, unless the lessee or bailee has held the goods for longer than two years with the lessor or bailor’s consent.

Tuesday, 17 January 2017

Hanjin Shipping recognition proceedings answer question about extent of the automatic stay under the Model Law on Cross-Border Insolvency

Readers will recall that on 23 September 2016 we posted an article about recognition under the UNCITRAL Model Law on Cross-Border Insolvency (Model Law) of the Korean rehabilitation proceedings for Hanjin Shipping.

After granting interim recognition of the rehabilitation proceedings in September 2016, the Federal Court granted final recognition orders on 11 November 2016.  The final orders obtained and the court’s reasons for granting the orders are significant as they answer the question of how the scope of the automatic stay is determined upon recognition of a foreign main proceeding of a corporate debtor under the Model Law.

Thursday, 1 December 2016

Unchain my … environmental responsibilities. The Environmental Protection (Chain of Responsibility) Amendment Act 2016 (Qld) explained

The insolvency profession (and the Queensland market in particular) has been abuzz this year with the issue of CORA – a shorthand reference to the Environmental Protection (Chain of Responsibility) Amendment Act 2016 (Qld). 

What does it mean for insolvency practitioners?  Can banks really be hit with a bill to clean up their borrowers’ environmental damage?  Will turnaround and restructuring professionals refuse to accept appointments out of fear of falling foul of the new regime?

Tuesday, 22 November 2016

The Arrium Administration breaks new ground with a novel group DOCA structure

‘Shipping steel, shipping steel . . .
Nobody knows, the way it feels
Caught between Heaven and the Highway
Shipping steel, shipping steel . . .’ 1

On 7 April 2016, Administrators were appointed to South Australian-based steelmaker and iron ore miner Arrium, which reportedly owed approximately AUD4.3 billion to its lenders, suppliers and staff.  The appointment covered 94 direct and indirect subsidiaries of Arrium Limited (the Arrium Companies), which at the time employed around 8,100 employees and contractors.

The broader Arrium Group also includes the Moly-Cop group, which is located mostly overseas, trading profitably and not subject to the insolvency proceedings.  The Administrators announced on 4 November 2016 that US private equity firm American Industrial Partners had bought Moly-Cop for US1.23 billion (AUD1.6 billion).  The proceeds of the sale will predominantly go to Moly-Cop’s lenders, reducing their debt by about 50%.

Tuesday, 8 November 2016

The regulatory crackdown on the illegal phoenix

Unscrupulous advisors, unconscionably preying on desperate directors driven by the fear of losing everything, have created a boom in illegal phoenix activity.  The below article, originally published on the McCullough Robertson white collar crime blog, Collared, sheds some light on the illegal phoenix, the gravity of the problem in Australia and considers what is being done to monitor and control the issue. 

We didn't start the fire
It was always burning since the world's been turning
We didn't start the fire
No, we didn't light it, but we tried to fight it’
[1]

The Illegal Phoenix
Illegal phoenixing is a major problem in corporate Australia.  In this post we consider what illegal phoenix activity is, how the problem is affecting the Australian economy and the recent regulatory crackdown on the issue.

Thursday, 3 November 2016

Will a deed of company arrangement be recognised and enforced by US and Canadian courts?

In August I presented on cross-border insolvency at the joint Federal Court of Australia and Law Council of Australia conference on corporations law.  The audience consisted of over 30 Federal Court judges and a range of other experienced corporate and insolvency lawyers.  I decided to present a case study, a major part of which was considering whether a hypothetical deed of company arrangement (DOCA) could be recognised and given the force of law in the US and Canada under their legislation based on the UNCITRAL’s Model Law on Cross-Border Insolvency (Model Law) in order to prevent US based creditors seeking court orders against assets in the US and Canada.  This sparked sufficient interest that I was then asked to present the same paper at the annual conference of the Insolvency and Reconstruction Law Committee of the Law Council of Australia a few weeks ago.  I thought I would share some insights from the paper in this blog.

Wednesday, 26 October 2016

Property developers – do you really need to batten down the hatches?

Last Wednesday we held the first event in our relaunched Restructuring and Insolvency Forum. 

A few days before the forum the Reserve Bank of Australia warned that the massive number of new apartment blocks approaching completion could send developers broke and leave the banks nursing big losses.  The day after the forum, The Australian reported the findings of Morgan Stanley research which forecast a credit crunch and a hard landing for the new apartment construction cycle with a surplus of 100,000 apartments by 2018.  The investment bank predicts a 'sudden stop' of apartment activity, triggered by regulator-driven rationing of credit, which will cause the construction industry to shed some 200,000 jobs.