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When will courts pull the plug? Understanding the termination of a Deed of Company Arrangement under section 445D(1)(g) of the Corporations Act 2001 (Cth)

When will a Court terminate a Deed of Company Arrangement (DOCA) for ‘some other reason’ under section 445D(1)(g) of the Corporations Act 2001 (Cth) (”the Act”)? In two recent cases, two separate courts have shed light on whether, and when, ‘public interest’ serves as a compelling reason to terminate a DOCA.

Yan v The Won Capital Pty Ltd [2024] NSWSC 758

Facts

In December 2017, Mr Yan loaned $10 million to GR Capital. In October 2018, GR Capital appointed administrators who reported to creditors the preliminary view that GR Capital had been insolvent since at least December 2017. Despite the administrators’ recommendations against the DOCA, creditors resolved on 30 January 2019 that GR Capital execute a holding DOCA allowing time to complete a property development before creditors could take action against GR Capital. Mr Yan commenced proceedings seeking termination of the DOCA under section 445D(1) of the Act to allow a liquidator to investigate insolvent trading claims. Mr Yan offered to provide funding to the liquidator for the investigations. As the limitation period on any insolvent trading claim was about to expire, it became urgent whether the DOCA was to be terminated and a liquidator appointed. [...]  READ MORE →

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Costs: Are they actually recoverable in the Local Court?

Successful claims in the Local Court may allow parties to be entitled to an order for costs in their favour.

Generally, at the end of a hearing, the Court will hear arguments from parties in relation to costs. As is customary, the Court will usually award successful parties their costs – although the proportion of costs to be awarded depends on many factors. However, a successful party can be awarded no costs for various reasons. For civil claims, there are certain quantitative thresholds that are recoverable within the Local Court. [...]  READ MORE →

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Payment of a Judgment Debt by Instalments: Moving a Mountain starts by carrying away small Stones

By Eleanor Campbell-Rogers, Law Clerk at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

Payment of a Judgment Debt

Debt recovery which ends up in an order of a Court or Tribunal requiring payment of a specific amount of money is a ‘judgment debt’. This type of debt recovery usually results from the Court/Tribunal accepting the creditor’s debt recovery attempts and awarding damages, costs, interest, repayment of a loan, restitution, lump sum child support, or a certified money order (amongst others). [...]  READ MORE →

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Letters of Demand: Why they are beneficial, and why they should never be ignored!

Letters of Demand

A letter of demand may be sent to debtor who owes money to a creditor. It is a formal notice of debt collection that is required to be paid and can often include a caution that if the money is not paid to the creditor by a certain date, legal action will be taken.

What should be included in a Letter of Demand?

  1. How much money is owed;
  2. Who is liable to pay the debt;
  3. Who the debt is to be paid to;
  4. How the debt was incurred and what the debt relates to;
  5. A date and approximate timeframe in which the debt should be paid/resolved (which should be reasonable in relation to the debt and history of the debt);
  6. Contact details of the debtor; and
  7. What will occur should the debt not be paid within the stipulated timeframe.

There are additional features of a demand which can make the demand more effective and more reliable as a genuine attempt to resolve the debt should the debt proceed to court.

Should it be important that the relationship between the creditor and the debtor remain intact, there are additional techniques that can be utilised to recover a debt without damaging the relationship. As such, letters of demand should be considered carefully before being issued to a debtor. [...]  READ MORE →

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PPS – What can it really do for you

By Hayley Hitch, Principal at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

PPSR…What is it? What does it stand for? How can it benefit you?

PPSR stands for Personal Property Securities Register. It is a register that records security interests granted to certain entities or individuals, and attaches a level of priority to each of the interests of those secured creditors.

A security interest is granted predominantly through a security agreement executed by 2 parties – a grantor and a secured party. A grantor is the party granting the security interest in an asset (whether existing, such as plant and equipment, or anticipated, such as proceeds of sale). The secured party receives the security interest in exchange for providing a service or promise of some form (such as advancing funds, providing goods on credit, etc.). [...]  READ MORE →

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DEBT COLLECTOR OR DEBT COLLECTION LAWYER? WHICH IS BEST FOR DEBT COLLECTION?

Debt collection is difficult at the best of times. To make debt collection easier, it is natural to turn to debt collectors or debt collection lawyers to assist. But who is best placed to deal with your specific situation? To answer this, it is worth thinking about the nature of the relationship you have with the debtor.

The debt collection relationship between debtor and creditor:

Debt collection can arise in all manner of situations. It can happen when a trusted and valuable commercial associate falls on hard times, when an opportunistic borrower thinks they can get away with not paying their bills, or for countless other reasons. The nature of the debtor/creditor relationship can be integral to the approach. [...]  READ MORE →

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Creditors Statutory Demands

Creditors Statutory Demands – Short Cut to Cash or Catastrophe?

Creditors Statutory Demands are a relatively cheap but powerful tool which can produce significant results quickly and efficiently, saving months on a long drawn out debt recovery process. However, with great power comes significant risk, and creditors need to understand when and how best to make use of this short cut, without getting lost in a labyrinth of litigation.

What is a Statutory Demand?

A statutory demand is a formal prescribed notice issued to a debtor company by a creditor pursuant to section 459E of the Corporations Act 2001 (Cth) (“the Act”). The demand is for the debtor to pay the outstanding debts within the statutory period of 21 days, or be presumed to be insolvent and face the risk of a winding up application being filed against the debtor company. Issuing a statutory demand however is subject to certain criteria stipulated in the Act. Section 459E states that a statutory demand can be issued to a person in respect of one or more debts, totalling the statutory minimum of $2,000 and must: [...]  READ MORE →

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Collecting Money: which court should I pick?

By Ewurama Appiah a Law Clerk at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

Do you have a debt to collect and are you unsure in which court to file your claim? Read on to find out more information on the steps you should take to ensure you maximise your ability to recover that debt!

Debt recovery through the courts is largely regulated by state and territory law and the procedural rules of the courts. Recovery of debts may include the repossession of assets or other legal enforcement of security interests. [...]  READ MORE →

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Why do It Alone? Engage a Debt Collection Lawyer

By Keely Wunsch, Law Clerk at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

You’re not alone if you have performed a service, provided a product/good, loaned money or entered an agreement and have not been paid what you are owed. Debt collection is a pervasive issue affecting individuals, businesses, and organisations. Handling debt collection alone can be arduous, time consuming and tricky. Instead, creditors would be well advised to consider engaging a specialist debt collection lawyer. This can ensure a streamlined process, technical expertise and commercial know-how, allowing creditors to avoid the stress and uncertainty associated with going it alone. [...]  READ MORE →

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Effective options to recover debts in NSW

Effective options to recover debts in NSW – What can I do to maximise success

By Ewurama Appiah a Law Clerk at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

With changing economic landscapes in New South Wales, the need to recover debts can often pose challenges for creditors. However, there are a range of actions that you can take to maximise your process to recover debts. Here are some steps that you can take to ensure your debt recovery process has the best chance of success: [...]  READ MORE →

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Debt Recovery for Small to Medium Businesses

Debt recovery – All small/medium business owners have been here before – you have taken the time and care to provide your quality goods or services to a customer, and when it comes time for them to pay, you get radio silence or a refusal to pay. Your phone calls, texts and emails with payment reminders and attempts to follow up have been unsuccessful, and now, weeks or months later, you are exhausted and still have a large unpaid invoice, plus all the time and money you have spent on debt collection services. [...]  READ MORE →

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Attention Company Directors – DIN or discipline?

By Ewurama Appiah a Law Clerk of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

The Australian Securities and Investments Commission (ASIC) has sent company directors a clear message: if you don’t have a DIN, you will suffer discipline at the hands of the regulator.

ASIC has commenced its first prosecution against a company director for failing to have a director identification number (DIN). Section 1272C(1) of the Corporations Act 2001 (Cth) stipulates that

‘’an eligible officer must have a director identification number’’. [...]  READ MORE →