Constructive trusts impact on corporate insolvency and bankruptcy by reducing the pool of assets available for distribution to creditors. Here we define constructive trusts, and look at their application in corporate and personal insolvency.
An important part of the personal bankruptcy process in Australia is the ability of those overseeing the process to ‘examine’ the individual undergoing bankruptcy or any other relevant person. This is the ability to question that person or those persons, under oath, about their financial affairs, fraud or involvement with the bankrupt. This power is contained within section 77C of the Bankruptcy Act 1966 (Cth) and is sometimes known as a ‘private examination’.