Company liquidation

The dynamics of liquidations can quickly turn toxic. Directors initially see the liquidator as a savior from tax debts and creditor actions and then when the investigations begin the directors see the liquidator as their enemy.

In this article we explain when a transaction might be voidable under that section, how these transactions differ from another type of voidable transaction, uncommercial transactions, and how liquidators pursue claims under this section.

Liquidators have a set of powers under the Corporations Act 2001 (Cth) (the Act) known as ‘voidable transactions’ (sometimes also known as ‘avoidance provisions’), which allow the liquidator to ‘claw back’ certain transactions in the case of an insolvent winding-up.

In insolvency, a liquidator sometimes seeks to recover money from a creditor on the grounds that the creditor has received an ‘unfair preference’ in a payment from the debtor company. Here we explain how the ‘running account’ principle can be used by a creditor to push back against a liquidator’s claim of unfair preference.

In this article, we look at the definition of ‘unfair preference’ claims — a mechanism used by liquidators to claw back some prior payments to creditors. We also look at the available defences for an unfair preference claim, and how the new ‘simplified liquidation’ procedure for small businesses deals with unfair preference claims.

In article: Summary: the ROCAP targets phoenix activity Starting in 2018, there have been new reporting requirements in place for companies that are going through an ‘external administration’ process (i.e. where a receiver or liquidator has been appointed). Directors and…

Pursuant to section 459C(2) of the Act, an application to wind up a company in insolvency must be done within 3 months of the date that a company is presumed to be insolvent.