This article is reposted here courtesy of MinterEllisonRuddWatts.
The Supreme Court last Thursday released its long awaited decision on directors duties engaged on a company’s insolvency – Debut Homes Limited (in liquidation) v Cooper  NZSC 100. The decision has profound implications for directors confronted with a business experiencing material financial distress and more broadly, for creditors, lenders and the insolvency profession.
This is the first time these issues have come before our highest court, and its decision is significant. In a in which directors have grappled with existential challenges to their businesses, and with the decision of the Court of Appeal pending in Mainzeal, the Supreme Court has raised the stakes for directors operating financially distressed companies. Increased recourse to formal insolvency and restructuring processes seems inevitable.
Article copied with permission from Kensington Swan.
The Primary Production Select Committee has reported back to the house on the Farm Debt Mediation Bill (No 2). The select committee has unanimously recommended that the Bill be passed by the House with some amendments to the original bill. The Bill will require secured lenders, as a prerequisite to taking any enforcement action, to offer mediation to a farmer and participate in the process in good faith. Farmers who are in financial trouble will also be able to initiate mediation regardless of whether a default has occurred.
Political efforts to change insolvency law are taking inspiration from Australia.
Labour MP Raymond Huo is consulting with the private sector about a bill that would allow private sector insolvency practitioners to take the place of government-employed official assignees, inviting the private sector into a role that has previously been monopolised by the government.
The new rules for insolvency practitioners which passed earlier this month will “level the playing field” in the sector and help screen for fee-chasing cowboys, according to the Restructuring Insolvency and Turnaround Association of New Zealand (RITANZ).
The Restructuring Insolvency and Turnaround Association of New Zealand (RITANZ) has welcomed news that the Insolvency Practitioners Bill has passed into law on Wednesday, almost a decade after it was first introduced into Parliament.
Members who attended the RITANZ Annual Conference in Auckland this year will have enjoyed a fascinating session on the Lehman collapse and a retrospective look at the causes of this and whether anything has positively changed in our approach to cross border insolvency.
The NBR attended this session and have produced the following article flowing from that discussion:
Members who attended the RITANZ Annual Conference in Auckland this year may recall Steve Flynn’s presentation strongly questioning the outcome in the Western Australian case of Hamersley v Forge, which involved the important issue of the inter-relationship between insolvency set off and PPSA. Steve’s subsequent article can be found at (2018) 29 JBFLP 175.
The Western Australian Court of Appeal has now overturned the lower court decision – a succinct case note on the appeal can be found at: