Zone of Insolvency

Zone of Insolvency

Tag Archives: Liquidation

A DIP of the toe into US Chapter 11 waters for Australia

Posted in Australia

On 24 September 2020, the Australian Government announced the introduction of two new restructuring and insolvency processes for small businesses (having liabilities of less than AU$1 million). It is proposed that these measures will be introduced from 1 January 2021 with a view to reducing the cost, time and complexity burden imposed on small businesses by the existing insolvency processes. The Australian Government has described the changes as “the most significant changes to the Australian insolvency framework in almost 30 years.”

The changes represent the latest in a series of measures introduced in Australia this year in response to the … Continue Reading

The Corporations Amendment (Strengthening Protections for Employee Entitlements) Act 2019 commenced April 6, 2019

Posted in Australia

Australia has a taxpayer funded scheme which guarantees employee entitlements arising out of liquidation up to statutory caps. It is known as the Fair Entitlements Guarantee Scheme (FEG). The Australian Government has become concerned that questionable practices which rely on FEG to avoid employee entitlement obligations, such as illegal phoenixing, are on the rise and imposing significant costs on FEG and therefore, the Australian taxpayer. The Government has introduced legislative amendments to facilitate the effective recovery of entitlements from parties which take part in these questionable practices.… Continue Reading

Stop in the Name of Equity: Second Circuit Affirms Dismissal of Appeals in Chapter 11 Liquidation Proceedings as Equitably Moot

Posted in US

MissionComplete_464402679In a case of first impression, the Second Circuit recently held that the doctrine of equitable mootness is applicable in appeals arising from Chapter 11 liquidations and affirmed the decision of the Southern District of New York to dismiss the appeals of three decisions in the Chapter 11 liquidation proceedings of the former book retailer Borders.

A Primer on Equitable Mootness

The equitable mootness doctrine allows a district court to dismiss a bankruptcy appeal when the district court determines that although relief could be provided, implementation of the relief would be inequitable. In the Second Circuit, the appeal of a … Continue Reading