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Have You Been Issued with a Bankruptcy Notice? – A General Guide to Bankruptcy Notices

By Parnia Firouzabadi a Law Clerk of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group. Receiving a bankruptcy notice demanding payment of money can be a stressful and overwhelming experience, particularly if you are unfamiliar with the process of responding to the notice and the legal implications of failing to do so.

Often the hardest, but most critical step is to act quickly. Do not ignore a bankruptcy notice, as failing to respond to the notice within the required timeframe will result in committing an ‘act of bankruptcy.’ This should not be taken lightly, as this will give the creditor (and in fact any creditor who is aware of it) the basis to make an application to the court for an order to be made against you declaring you bankrupt. This order is known as a ‘sequestration order’ and will mean that you will lose control of your assets, and your estate will be managed by a bankruptcy trustee, either the government (the Official Trustee) or a private trustee (a Registered Trustee). The trustee will take control of your assets, administer your financial affairs, and deal with creditors. [...]  READ MORE →

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Paying the Piper: When will the Federal Court turn to receivership to enforce unsecured judgment debts?

By Jacob Reardon and Keely Wunsch, an Associate and Law Clerk in our Insolvency, Restructuring and Debt Recovery Group.

This article was published to Mondaq on 20 February 2026, accessible via the link here 

In Scott (Trustee), in the matter of Stolyar (Bankrupt) v Stolyar (No 5) [2024] FCA 37 (“Stolyar 5”), the applicant trustee in bankruptcy successfully obtained orders in the Federal Court of Australia to appoint himself as receiver over a property located at Longworth Avenue, Point Piper (“Longworth Avenue”) held in the name of the first respondent, Ms Stolyar. [...]  READ MORE →

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Ogbonna v CTI Logistics Ltd (No 8): The sequestration order was set aside but the costs story did not end there

By Harold Peng, a Solicitor of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group.

Ogbonna v CTI Logistics Ltd (No 8) [2025] FCA 1525 (3 December 2025)

In October 2025, we published a case note on Ogbonna v CTI Logistics Ltd (No 7) [2025] FCA 1125 (“Ogbonna 7”), where the Federal Court allowed Mr Ogbonna’s appeal and found that the sequestration order made against him should not have been made.

The orders made in Ogbonna 7 left a practical question hanging:

If the bankruptcy order is set aside, what happens next, and who pays the legal costs that have built up over years of litigation? [...]  READ MORE →

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Regulating the Regulator – Reviewing decisions of the Official Receiver under s139ZQ

By Amelia Fearnside and Parnia Firouzabadi, Law Clerks of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group.

In a decision which appears to be the first of its kind, a bankruptcy trustee has taken the bankruptcy regulator to Court to overturn its refusal to issue a statutory notice. In Cooper v Official Receiver [2025] FCA 1155, the Federal Court made consent orders in the nature of certiorari, which quashed the decision of the Official Receiver who had refused to issue a notice sought by a trustee under s 139ZQ of the Bankruptcy Act 1966 (Cth) (“the Act”). [...]  READ MORE →

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Queue Jumping! – Priority of Creditors during Liquidation

By Lara Wehbe a Law Clerk of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group.

In an insolvent winding up, by definition there are not enough assets to go around. Priority of payment is paramount, however ordinary unsecured creditors are, ordinarily, last in the queue. The case of Ford Kinter & Associates Pty Ltd v Reliance Franchise Partners Pty Ltd (in liq) [2025] FCA 139 is a great example of when the Court will allow ordinary unsecured creditors to jump the creditor queue and gain priority, where they have taken risks to fund litigation proceedings with the aim of recovering assets for the benefit of creditors. This prioritisation showcases the flexibility and broad application of section 564 of the Corporations Act 2001 (Cth) (“the Corporations Act”) as it supports creditors that dive headfirst into these risks. [...]  READ MORE →

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Ogbonna v CTI Logistics Ltd (No 7): Understanding the Importance of “Presently Payable” in Bankruptcy Proceedings

By Harold Peng, a Solicitor, Parnia Firouzabadi, Lara Wehbe and Amelia Fearnside, Law Clerks of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group.

Ogbonna v CTI Logistics Ltd (No 7) [2025] FCA 1125 (12 September 2025)

Just because you are vexatious, doesn’t mean you don’t (always) have an arguable case…

In this decision the Federal Court has allowed an appeal by a vexatious litigant against a 2022 sequestration order made against him because the petition debt was not “presently payable” at the relevant time. WA enforcement law imposed real pre-conditions on enforcing an older judgment, and those pre-conditions had not been met. The Court stood over the implications of its judgment including considerations affecting the trustee in bankruptcy who had been appointed just under 3 years. [...]  READ MORE →

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Received a Statutory Demand? – Don’t Panic (But Act Promptly): A General Guide to Creditors Statutory Demands

By Parnia Firouzabadi and Lara Wehbe Law Clerks of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

Receiving a statutory demand from a creditor claiming that your company owes money can be quite an overwhelming experience, particularly if you are unfamiliar with the process of responding to the demand and the legal implications of failing to do so.

On the other hand, it can be tempting (but extremely unwise) to treat a statutory demand like any other demand from a creditor. From the moment your company receives a statutory demand the clock is ticking, as such it is important that you act in a timely manner to either respond to, or comply with, the demand. In the event that your company fails to respond or comply with the statutory demand within the strict timeframe, it is presumed to be insolvent which may in turn lead to winding up proceedings. [...]  READ MORE →

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Trust issues? – The Court’s got your back.

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

Although there are adverse problems that can arise when a trust deed is missing, destroyed, or misplaced, trust us when we say all is not lost!

In fact, losing an original trust deed is not an uncommon occurrence brought before the Courts. In Gainer (considered below) the court held that “applications for judicial advice by trustees in relation to lost trust deeds are not unusual” (per Kunc J at [16]) [...]  READ MORE →

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High Court refuses special leave on s588FDA unreasonable director related transactions

By Harold Peng, a Solicitor of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group.

The High Court has refused special leave to appeal in the dispute between CEG Direct Securities Pty Ltd (“CEG”) and the liquidator of Runtong Investment and Development Pty Ltd (in liq) (“Runtong”). The Court said that the result depended on the specific facts of the case and that no wider point of law was involved. It also said there was no good reason to doubt the Full Federal Court’s judgment. This leaves the Full Federal Court decision as the main guide for future cases of this type. [...]  READ MORE →

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Equitable Receivership to Enforce a Chinese Arbitral Award in Australia

By Harold Peng, a Solicitor of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group.

Case Note: Ningbo Weisheng Dingxuan Equity Investment Fund Partnership Enterprise (Limited Partnership) v Zhong [2025] FCA 1053

This decision of Ningbo Weisheng Dingxuan Equity Investment Fund Partnership Enterprise (Limited Partnership) v Zhong [2025] FCA 1053 shows how a recognised foreign arbitral award can be turned into a real recovery against Australian assets. The creditor had already converted a Chinese arbitral award into an Australian judgment for $176 million under s 8(3) of the International Arbitration Act 1974 (Cth). The question was how to realise value when the key local asset was co-owned. [...]  READ MORE →

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Shortcut to Intention: The presumption in s128B(5) Bankruptcy Act

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

Section 128B(5) creates a shortcut to establishing that a bankrupt was intending to defeat his creditors in making superannuation contributions. In the absence of proper books and records of the bankrupt’s business, the section presumes the bankrupt was insolvent, which in turn deems the relevant purpose to exist. But records of what business?

In the case of Re Andrew Superannuation Fund v Sijabat [2023] FCAFC 6, the Full Federal Court considered for the first time the scope of this presumption as it applies to superannuation contributions made prior to bankruptcy. [...]  READ MORE →

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Gambling on Bankruptcy: AFSA’s Draft Guidance

By Harold Peng, a Solicitor of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group.

The Australian Financial Security Authority (“AFSA”) has released a draft Inspector-General Practice Guidance (“the IGPG”) on Gambling Offences. The paper explains how gambling and “hazardous speculation” may be treated where they contribute to a person’s bankruptcy, and particularly as they relate to the criminal offence contained in s 271 of the Bankruptcy Act 1966 (Cth) (“the Act”). [...]  READ MORE →