Given that our society is so dependent upon credit it is almost inevitable that creditors will face debtors were unable to honour their commitments.
Insolvency disputes arise in two contexts. The first is personal insolvency which involves individuals who cannot pay their debts. The 2nd involves corporate insolvency where a company is unable to pay its debts.
If you are a creditor and your debtor, whether an individual or a company, has failed to pay you then it is possible that you may need to consider bankrupting that person or winding them up.
Potential Scenarios – Insolvency Disputes
Personal Insolvency Disputes about: –
- the meaning of insolvent, whether under the Bankruptcy Act or Corporations Act;
- whether someone is "insolvent" by reference to the "cash flow" test and applicable case law;
- making someone bankrupt due to a failure to comply with a bankruptcy notice;
- claims made by the trustee, under the doctrine of relation back, against property;
- a "proof of debt" lodged by you as a creditor;
- undervalued transactions, transfers to creditors and preferences involving court proceedings or a s139 ZQ notice;
Corporate Insolvency Disputes about: –
- voluntary administration (including its effect on contractual arrangements, creditors, proceedings);
- a members voluntary winding up or creditors voluntary winding up;
- compulsory winding up (including the making of a statutory demand or an application to set aside a demand);
- the effects of liquidation;
- insolvent trading;
- voidable transactions (including unfair preferences, uncommercial transactions, unfair loans and transactions obstructing creditors rights);
- lodging a proof of debt.
Let Us Help You
As a Managing Director: –
- Deal with a statutory demand where there is a genuine dispute about the debt.
As a Creditor: –
- wind up a company that has failed to pay a judgement debt.
As an Administrator: –
- understand the effect of the winding up application made before your appointment;
- understand whether a landlord can take possession of property for non-payment of rent.
As a Liquidator: –
- advise you on how to prove insolvency;
- understanding the presumptions as to insolvency;
- appreciate the time periods within which unfair preferences can be challenged;
- understand which transactions may be voidable as unfair preferences.
If you are a creditor, managing director, administrator or liquidator who needs help with bankruptcy, administration, insolvency, insolvent trading or winding up a company contact us on T: +61 2 9199 4530 to see if we can help you.