Insolvency – Liquidations and Bankruptcy (Corporate and Personal)
We advise clients and attend to matters in regard to undue preference claims, Director Penalty Notices, Creditors’ Statutory Demands, winding up applications (liquidations), Bankruptcy Notices, Creditors’ Bankruptcy Petitions, insolvent trading actions, advising directors on their duties, uncommercial transactions and proceedings commenced by the Australian Taxation Office against our clients.
Directors who received a Director Penalty Notice need to act swiftly to avoid the consequences of being personally liable for the taxation debts of their company. We work in consultation with well recognised and established insolvency practitioners to provide the best advice to our clients with regard to these issues and insolvency matters in general for both private individuals and companies.
We advise both creditors and debtors with regard to Creditors’ Statutory Demands which are notices served on companies requiring payment of a debt within 21 days failing which the debtor company is deemed to be unable to pay its debts and is subject to being wound up (liquidated).
We attend to winding up applications (liquidations) for both creditors and debtor companies and are able to defend (and pursue) liquidation proceedings whilst at the same time negotiating commercial outcomes for our clients.
We act for creditors and debtors in their personal capacities in respect of bankruptcy proceedings in the Federal Magistrates’ Court.
Batten Sacks are able to advise with regard to bankruptcy matters and in particular the service of Bankruptcy Notices and Creditors’ Petitions on debtors to declare an individual bankrupt (and in particular debtors against whom a judgement has been obtained) and the setting aside of Bankruptcy Notices and defending Creditors’ Petitions. Additionally we are able to advise in regard to the consequences of an individual being declared bankrupt.
Insolvent Trading Claims, Uncommercial Transactions and Undue Preference Claims
We act for and on behalf of liquidators with regard to insolvent trading claims, uncommercial transactions and undue preference claims. Insolvent trading claims relate, in the main, to a liquidator pursuing a claim against the director of a company in liquidation for the loss suffered by creditors resulting from the director allowing the company to incur a debt which is not later repaid at a time when the company was insolvent and when the director suspects or should have suspected that the company was insolvent or the company became insolvent as a result of the debt being incurred. Directors have various defences to these claims in respect of which we are able to advise them.
An uncommercial transaction is where a liquidator seeks to recover the loss suffered by a company in liquidation or benefit gained by a third party from any transactions at “less than market value”. We are able to advise on these claims and defences to these claims which relate in the main to “good faith without suspicion of insolvency”. Such a defence is also available to a claim by a liquidator with regard to the receipt by a creditor of an “unfair preference”.
In respect of undue preference claims we advise both liquidators and clients who are being pursued by liquidators. A claim by a liquidator against a party for an “undue preference” obliges a liquidator to prove in respect of the transfer of property (or money) to such party that the company was insolvent at the time and that this had the effect of giving to the relevant creditor who received the transfer or payment a preference, priority or advantage over the other (same class of) creditors of the company in liquidation.