The content of this article may be out of date - please refer to our more recent articles for up-to-date information. McDonald Vague, Insolvency and Business Recovery Specialists, strongly recommend that businesses register their security interests on the Government's Personal Property Securities Register (PPSR), and increase their awareness of the consequences of non registration. Failure to utilise this legislation can be a doubly expensive process in the event that their debtor company is placed in liquidation. Many companies are not aware that the legislation applies to supplies of goods on credit, leases for terms of greater than one year (or indefinite terms) and consignment goods. Jonathan Barrett, an Associate with McDonald Vague, says valid terms and conditions of trade, as…

The content of this article may be out of date - please refer to our more recent articles for up-to-date information. Insolvency Practitioners liaise with the law profession on a daily basis. As in all professions it is easy to communicate with some practitioners and difficult to communicate with others. In such circumstances time and effort is wasted. Increased costs reduce the amount which will be available to creditors and delay any payout. We are invariably happier when the solicitor on the other side has the skill to present his or her clients' case clearly, concisely and in a way we understand. We have an ongoing case in our office which is an extreme example of what we encounter. The…

The content of this article may be out of date - please refer to our more recent articles for up-to-date information. Graeme McDonald and John Vague attended a Business Law Reform seminar in Wellington on Thursday, 22 November 2001. At that seminar Laila Harre, the Associate Commerce Minister, announced changes to the laws dealing with preferential payments. You may be aware, that both Graeme and John, other Insolvency Practitioners, the Law Commission and the Credit & Finance Institute have made submissions recommending that the amount of preferential payments should be reduced so that the amount which will be available to unsecured creditors can be maximised. In the circumstances we found it hard to come to grips with the announcements of…

The content of this article may be out of date - please refer to our more recent articles for up-to-date information. On 8 August 2001 a case was heard before Laurenson J. Although the case was specifically to do with Tasman Pacific Airlines NZ Limited, the outcome of the case affects all liquidators. The decision in the case read as follows: "The applicant liquidators do not have any power, right and/or obligation to provide a list of creditors of Tasman Pacific Airlines of NZ Ltd (In Receivership and In Liquidation) to any person or body except in circumstances prescribed in s.256 of the Companies Act 1993". The important part of the decision insofar as we are concerned is the part…

The content of this article may be out of date - please refer to our more recent articles for up-to-date information. The intention of these articles was to give Chartered Accountants an appreciation of insolvency matters. If I have concentrated on the potential liability of the Chartered Accountant this is because the risks of the accountant being sued are very real and are not just theoretical or perceived. THE CASEIn the recent case which I am about to discuss, the accountant was not on trial. He was merely a witness. He was however, severely criticised by the Judge. The case has two aspects which are common to many companies in financial difficulties:- •The directors were conscientious and put more money…

The content of this article may be out of date - please refer to our more recent articles for up-to-date information. In an important judgment in Re Brumark Investments Limited, the Privy Council upheld the concept of fixed charges on present and future debts but held that Re New Bullas Trading Limited [1994] 1 BCLC 449 had been wrongly decided. In Re New Bullas the debenture was expressed to operate as a fixed charge over uncollected book debts with the fixed charge being released and replaced by a floating charge when the book debt was paid and converted into proceeds. If a charge over debts is to be fixed there must be a real restriction on the borrower's ability to…

The content of this article may be out of date - please refer to our more recent articles for up-to-date information. Business Law Reform Bill Submission 6 July 2001 Marian Kljakovic Competition and Enterprise Branch Ministry of Economic Development P O Box 1473 WELLINGTON Dear Ms. Kljakovic BUSINESS LAW REFORM BILL 2001 I am pleased to submit the comments of INSOL New Zealand, on the Business Law Reform Bill 2001. INSOL is the New Zealand Chapter of INSOL International, the professional organisation of insolvency practitioners. While we applaud the Ministry's intention to undertake the necessary housekeeping to smooth legal procedures relating to business, we have reservations concerning some of the proposals: Disclosure of Directors Addresses The discussion paper proposes the…

  The content of this article may be out of date - please refer to our more recent articles for up-to-date information. Text of an address to a colloquium "Chinese Insolvency Law Symposium: Developing an Insolvency Infrastructure" held at the University of Hong Kong, 17-18 November 2000 The colloquium was organised by the Asian Institute of International Financial Law and co-sponsored by the Department of Politics and Law, China University of Politics and Law, Duke University Global Markets Centre, Hong Kong Society of Accountants, Inter-Pacific Bar Association, and Pepperdine University School of Law. The colloquium involved discussions among academics, insolvency practitioners, judges and government officials from mainland China, Hong Kong SAR and overseas, on issues of PRC insolvency law reform…