Two recent cases have made the Liquidator’s task in recovering preference payments a lot tougher. Decisions that have been relied on for decades – on the ‘running account’ and third-party payments – have been overturned.
Recovering unfair preferences is a useful tool given to company Liquidators to bring all creditors back to being on a level playing field and treated equally.
Part X of the Bankruptcy Act allows individuals to propose an alternative to bankruptcy (a ‘Personal Insolvency Agreement’). Whilst it is used infrequently, the process can result in benefits to the individual debtor and a higher return to creditors than bankruptcy.
For individuals, when debt becomes unmanageable, bankruptcy is not the only option available to gain control of the situation.
The Personal Property Securities Act contains penalties for misuse of the register. The Government regulator, AFSA, are now taking action to maintain the register’s integrity.
The Personal Property Securities Register (“PPSR”) is a publicly-accessible online register, containing records of prescribed personal property and claimed security interests in personal property. However, allowing such a large pool of entities to register on the PPSR opens up a greater possibility for misuse.
The Federal Court has granted leave to a Trustee in Bankruptcy to disclaim a litigation funding contract – which provided the funder with a premium of 80-85% plus reimbursements of its costs.
Not all contracts that have been entered into by a bankrupt are going to be performed during the bankruptcy. Some existing contracts can be ‘disclaimed’, freeing the Trustee in Bankruptcy from taking any further action with regard to the contract’s performance.