Statutory Demands and Winding Up Applications
The winding up of a company in insolvency is often precipitated by the service of a statutory demand for payment of an undisputed debt. We regularly act for companies pursued by creditors, and for creditors pursuing recovery of debts owed by companies, in relation to:
- preparing and serving statutory demands requiring payment of undisputed debts;
- making or opposing applications to set aside statutory demands on the basis that there is a genuine dispute about a debt claimed against a company, the existence of an offsetting claim by the company against a creditor or some other good reason; and
- making or opposing applications to wind companies up.
Company Administration, Receivership and Liquidation
Solomon Brothers regularly acts for various parties involved in the voluntary administration, receivership and liquidation of companies, including insolvency practitioners (administrators, receivers and liquidators), creditors, and company directors, in respect of all issues that arise when a company enters any form of external administration, such as:
- preservation and realisation of a company’s assets;
- the impact of administration, receivership and winding up on creditors’ rights;
- the investigation of a company’s affairs, including conducting public examinations of a company’s officers and other persons acquainted with a company’s affairs;
- priorities of competing claims to a company’s property; and
- asset recovery – including acting on claims of the company arising from pre-administration dealings, claims for the clawing back of the company’s property because of a voidable transaction and claims for insolvent trading.
Recovery of Property
Solomon Brothers also regularly acts for liquidators pursuing the recovery of property of a company, and for parties who are faced with a recovery claim by a company’s liquidator, including claims for:
- recovery of debts owed to a company, or for damages payable to a company;
- recovery of unfair preferences;
- recovery of uncommercial transactions;
- claims against directors for insolvent trading; and
- claims against directors or third parties arising from breaches of directors’ duties.
Securities and Priorities
The team at Solomon Brothers can provide representation and advice to creditors, insolvency practitioners or parties in financial stress concerning:
- the rights conferred on creditors by securities they hold, and the impact upon those rights of personal bankruptcy or a company being wound up; and
- competition between secured or preferential creditors (such as employees who are owed entitlements) for the assets of an insolvent party, and the order of priorities between creditors.
We can assist directors of a company who are concerned that the company is or may become insolvent, or of a company that has entered some form of external administration (voluntary administration, receivership or winding up). The issues that confront directors in these situations with which we can assist include:
- determining whether the company should be placed into voluntary administration or wound up;
- the risks of a director having personal liability, for reasons including:
- the giving of personal guarantees for the company’s debt;
- the director having a loan account with the company;
- the company having PAYG withholding or superannuation guarantee amounts;
- beaches of directors’ duties;
- the company having traded whilst insolvent; and
- the possibility of avoiding personal liability for insolvent trading because of the safe harbour defence for the development and implementation of courses of action that would be better for the company than immediate external administration.
Solomon Brothers can provide representation and advice in relation to the various issues that arise with respect to personal bankruptcy, including:
- making or opposing bankruptcy petitions;
- representing trustees in bankruptcy in pursuing investigations and asset recovery;
- acting on claims seeking to claw back assets transferred prior to bankruptcy;
- providing advice and representation with respect to the rights of creditors of a bankrupt, including issues with respect to securities and the priority of creditors’ claims; and
- proposals for compositions to creditors so that an existing bankruptcy can be annulled.
Arrangements Without Bankruptcy or Winding Up
We also regularly act on:
- formulating and advising on proposals for personal insolvency agreements under Part X of the Bankruptcy Act 1966 or deeds of company arrangement;
- drafting personal insolvency agreements and deeds of company arrangement; and
- providing advice about arrangements for restructuring options outside of the formal personal insolvency agreement or deed of company arrangement processes.