When is a holding company liable for the debts incurred by its subsidiary company?
Holding or parent companies control the shares of other companies, being subsidiary companies. These holding companies can be liable for the debts incurred by their subsidiary companies, without having been involved in the transaction that incurred the debt. Continue reading
The judgment of Independent Contractor Services (Aust) Pty Limited ACN 119 186 971 (in liquidation) (No 2)  NSWSC 106, delivered on 23 February 2016, held that a liquidator appointed to a company, which acts solely as the corporate trustee of a trust, must:
1. approach the Court to obtain approval of the liquidator’s remuneration and the liquidator’s disbursements (which the liquidator has a right of indemnity for in priority to trust creditor claims); and
2. distribute trust assets to creditors equally, including employee claims, with no special priority as set out in the statutory order of priority codified by section 556 of the Corporations Act 2001 (Cth).
A Garnishee Order is a form of enforcement action that can be used for the recovery of a court-ordered judgment debt. It can be served on a third party who owes monies to the debtor, directing that the third party pay that money to the entity that issued the Garnishee Notice, rather than the debtor.