bankruptcy

ATO recovery powers – are your house sale proceeds at risk?

A garnishee order is a form of enforcement action that can be used for the recovery of debts. It can be served on a third party who owes money to the debtor, directing the third party to pay that money to the entity that issued the garnishee notice, rather than the debtor.

Ordinarily, a court-ordered judgment is required before a garnishee order can be made. However, the ATO can issue a garnishee notice in relation to outstanding tax debts without a court judgment being entered, against any person or business who owes money to the tax debtor or holds money on their behalf. (more…)

By Renee Stevens, ago

Payments made to companies by mistake before or after bankruptcy/liquidation

Situations can arise where a payment is made by one party to another party by mistake.  This occurs, for example, where a debtor makes a payment to the incorrect entity within a group of companies, a bank remits funds to the account of an unintended recipient, or a finance company makes payment to a supplier of equipment based upon forged invoices. (more…)

By Renee Stevens, ago

Liquidation of Company Trusts

The judgment of Independent Contractor Services (Aust) Pty Limited ACN 119 186 971 (in liquidation) (No 2) [2016] 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).

(more…)

By Renee Stevens, ago