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14 Indicators of Insolvency

  The list comes straight out of ASIC v Plymin, Elliott & Harrison [2003] 21 ACLC 700 and has been quoted a further 29 times in subsequent cases and is the checklist that almost every liquidator goes off. 1. Continuing losses. 2. Liquidity ratios below 1. 3. Overdue Commonwealth and State taxes. 4. Poor relationship with … Read more

Independence is Decisive in the Choice Between Liquidators

Where a voluntary administrator is appointed after  a winding up application is filed and the matter is contested the Court will often be faced with a decision as to let the incumbent administrator continue as liquidator or appoint the creditor’s preferred choice. This West Australian case is the most recent decision on point in favour … Read more

Builders, Bankruptcy, and Informal Arrangements

A licensee may not be able to utilise the shelter of the Bankruptcy Act 1966 to restructure their affairs or have a new beginning in the way that others might. The reason for this is that the state government imposes heavy burdens on builders who suffer an insolvency event. Queensland has the clearest and most … Read more

Company in trouble- Need a Safe Harbour?

The Federal government has introduced a new set of laws to prevent directors from being prosecuted for insolvent trading so long as the ‘safe harbour’ provisions of the Corporations Act 2001 (Cth) are complied with. Here is a link to the sections starting at s588GA For the protections to take effect you need to: 1. … Read more

Liquidate or Deregister?

Deregistering an inactive or dormant company is a relatively simple and inexpensive exercise. Before deregistering a company it is very important to take the time to consider whether the company truly qualifies for deregistration. The ASIC form requires you to make the following declaration: I declare that the statements below are correct. (a) All members … Read more