| 588FH Preferences |
Section 588FH allows liquidators to recover money from an entity related to the company, when a creditor has received a preferential payment and that related entity was released from an obligation to that creditor. |
| Bankruptcy & the Family Home |
How the Bankruptcy Act applies to a bankrupt's family home is often misunderstood. The loss of the bankrupt's family home is usually felt more intensely than the loss of any other asset. |
| Determining Insolvency |
Proving the insolvency of a company or of a person (an 'entity') at a particular point in time is usually one of the most difficult and time consuming tasks of an external administrator. |
| Director Related Transactions |
Liquidators investigate transactions when they believe that they were not beneficial to the company, particularly when they involve parties related to the company. |
| Directors' Liabilities |
Directors can become liable for company debts through insolvent trading; unreasonable director related transactions; employee entitlements; taxation debts and personal guarantees. |
| Dividends |
The aim in most external administrators is to distribute the debtor's property amongst the creditors of the estate. |
| Employee Entitlements |
Employees are usually the first creditors to be effected as their jobs will be at risk and there is a chance that some of their outstanding entitlements will not be covered by GEERS. |
| Ending a Liquidation |
A liquidation usually ends with the deregistration of the company. However, a liquidation may end through a decision of the directors and the liquidator, or an Order of the Court. |
| Getting out of Bankruptcy |
An annulment is a complete undoing of the bankruptcy, and.can only happen if the bankrupt; pays all of the debts and costs of the estate; has a section 73 proposal accepted; or the Court so orders. |
| Income Contributions |
A bankrupt may be liable to make a contribution to their estate from income earned during their bankruptcy so that some of the rewards from the bankrupt's efforts during the bankruptcy period can be used to satisfy their past debts. |
| Indicators of Insolvency |
Because the issue of insolvency frequently arises, some Judges have developed indicators of insolvency that they look for when considering the question. |
| Insolvent Trading |
This is a claim for compensation made against a director of a company in liquidation where the directors should have stopped the company from incurring those debts. |
| Landlord Rights |
The end result of most administrations will either be that: (a) the tenant will leave the premises; or (b) its financial affairs will be rectified and the tenancy will continue. |
| Lending Money |
Everyone about to lend money to someone will want to know that they have the best chance of being repaid, or if should the loan go bad, that they can recover the maximum amount possible. |
| Loss of Employee Entitlements |
Liquidation is a process for the winding up of a company's affairs in order to provide for a dismantling of a company's affairs and a fair distribution to creditors. |
| Meetings of Creditors |
Both the Corporations Act and the Bankruptcy Act have strict rules about how meetings of creditors are to be run and how issues are to be decided. |
| Objections to Discharge |
There are times when it would be in the interest of the creditors or the general public that the bankrupt not be discharged at the usual time. |
| Preferences in Bankruptcy |
Trustees may seek to recover payments made to a creditor prior to the bankruptcy, where that creditor has received a preference or advantage over other creditors. |
| Preferences in Liquidations |
Liquidators may seek to recover payments made to a creditor prior to the liquidation, where that creditor has received a preference or advantage over other creditors. |
| Proofs of Debt & Securities |
Creditors holding securities over assets must take care that they do not void their security by lodging a proof of debt incorrectly. |
| Public Examinations |
A public examination is the common name given to the process of an external administrator formally examining parties under the Corporations Act or the Bankruptcy Act. |
| Retention of Title |
A retention of title clause provides that ownership of the goods supplied does not pass to the customer until full payment has been made - the supplier retains title.
This factsheet is being updated. |
| Revesting of Property |
Revesting is the transfer of property that had vested in a bankruptcy trustee back to the bankrupt after the end of the bankruptcy if the bankruptcy trustee has not realized those assets. |
| Securities over Assets |
A security is a pledge of an asset to a particular creditor to support a debt. A creditor that holds a security is know as a secured creditor. The asset is known as being "charged" and securities are also known as charges.
This factsheet is being updated. |
| Subcontractor's Charges |
A subcontractor's charge is a statutory security granted to certain parties under the Subcontractors' Charges Act. The charge secures payment of monies owed to subcontractors. |
| Uncommercial Transactions |
Liquidators investigate and sometimes seek to void transactions that they believe were either not beneficial to, or was detrimental to, the company. |
| Void Corporate Dividends |
Directors may become liable to compensate a company if a dividend was paid but not out of profits or if the dividend was paid while the company was insolvent. |
| Void Transactions - Bankruptcy Act |
Certain transactions done before bankruptcy may be overturned if the consideration paid was undervalue, or if the transaction was done to defeat creditors. |