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The Bankruptcy Loophole

By Bonnie McMahon, Solicitor, of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

Creditors frustrated by a debtor entering into bankruptcy or a composition should remember that some claims can continued to be pursued, even after the debtor becomes bankrupt or enters a deed of composition with his or her creditors. Debtors in such actions may also need to be aware that going bankrupt may not bring the claims to an end.

Justice Emmett of the Supreme Court of New South Wales has provided some useful guidance in these matters.

The proceedings in the matter of Ritchie v Woodward (Executor of the Estate of the late Brian Patrick Woodward); Rujo Pty Ltd v Woodward (Executor of the Estate of the late Brian Patrick Woodward); Barona Group Pty Ltd v Woodward (Executor of the Estate of the late Brian Patrick Woodward) [2016] NSWSC 1715 (“Ritchie”), proved to be anything but simple for his Honour, with a hearing lasting four weeks (a week longer than expected), and an array of legal topics covered including: contracts, professional negligence, misleading and deceptive conduct, vicarious liability, bankruptcy and insurance claims.
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