10 Dec Fast Four – A Collection of Four Short Insolvency Topics
1. So Bankruptcy lasts 3 years right?
Not for fictitious Ken who completed and dated his statement of affairs (the document that kick starts the bankruptcy period) (SOA) before he was even made a Bankrupt by the Court. Some key lessons from this case: (a) don’t be too over-eager and pre-date your SOA; (b) when you submit your SOA, make sure it has been received and accepted; and (c) ask questions of, and regularly seek updates from, your Bankruptcy Trustee. Want to read more of Ken’s unfortunate story, click here.
2. Does 8 minutes late render the Deed of Company Arrangement void?
08 am on the 16th business day, the Deed of Company Arrangement (DOCA) was signed and sent to the then Administrator. 15 business days is all that is allowed (usually). Does this 8 minute delay render the DOCA void? Not if, upon an application to Court, the Court decides that it would be unreasonable to void the DOCA. To find out more about DOCA’s (click here) or to read more about this interesting outcome read our article here.
3. Did you know that you can set aside a statutory demand in the Family Court!
If your company receives a statutory demand, it is important that you urgently seek professional advice, otherwise 21 days later that creditor can apply to wind-up your company in liquidation. If your lawyers apply to set aside the statutory demand, they theoretically can do so in the Family Court. But as AXL’s lawyers recently found out, this can create all sorts of dramas if you don’t tell the Family Court what they need to do. You can read AXL’s story here.
4. The who and how of a successful bankruptcy notice: Read more about our who and how story here.
a. The ‘who’: Tradie Pty Ltd is owed a debt by John, and so Tradie decides to commence court action against John for unpaid debts. Tradie wins, but some time passes before it does anything to enforce its rights. In the meantime, Tradie changes its business name to Cheap-Trades Pty Ltd. On the bankruptcy notice issued to John, the name Cheap-Trades is only used (not Tradie). According to the Court, this notice was invalid because it did not adequately or reasonably describe the who.
b. The ‘how’: The bankruptcy notice sent out by Cheap-Trades says that payment of the debt owed by John can be paid to XYZ Lawyers, PO Box 123, QLD 4000. According to the Court, this notice was again invalid because a PO Box does not allow John a reasonable opportunity to know how to pay the debt.
Article Written by Matthew Hudson, Senior Manager, SV Partners Brisbane