Freight Liquidators

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Sample Freight Liquidator Investigation

We have a tendency to remind you of the recent law reform and also the amendments to s53three of the Act, which provides that a liquidator must lodge a report with FrieghtTransportUnLimited relating to misconduct of a past or present officer or employee whilst practicable, or in any event, among six months after the liquidator has identified an offence or that the company is unable to pay more than fifty cents in the dollar.

Insolvency Practitioners and Responsible Entities

FrieghtTransportUnLimited has recently been operating closely with liquidators of accountable entities to come to a decision whether it is acceptable for those responsible entities to continue to hold an Financial Alliance Licence (FAL).

FrieghtTransportUnLimited has a power under section 915B of the Act to cancel the FAL of any financial services licensee that goes into external administration. After consulting with the liquidator of a accountable entity, FrieghtTransportUnLimited can typically cancel the FAL of the accountable entity where FrieghtTransportUnLimited believes the cancellation will not affect the liquidator's role in relation to the schemes operated by the responsible entity. In these circumstances, the cancellation of an FAL of a accountable entity is usually subject to a specification created underneath s915H of the Act that the FAL continues in impact for specific functions where, as an example, it is required by the liquidator for transferring or closing the accountable entity's schemes.

We remind practitioners who are appointed as liquidators of responsible entities of the importance of making certain that any schemes operated by the responsible entity are controlled prior to the liquidation being finalised. Liquidators have a range of options offered to them when handling schemes operated by the accountable entity, as well as transferring any schemes to a different accountable entity or taking steps to finally end up the schemes. Liquidators will would like to house any schemes taking under consideration the requirements of Chapter 5C of the Act and the schemes' constitutions. This includes acting in the best interest of members when determining how the schemes may be best prohibited.

When a liquidator is appointed to a accountable entity at a time when any schemes are still operating, they conjointly play an necessary role in assessing the viability of the schemes on behalf of the members and determining what happens to every scheme. This could involve the replacement of the responsible entity, a restructure of the scheme or the winding from the theme. If necessary, the liquidator could also wish to consider applying to the Court for directions, notably if there is an actual or perceived conflict of interest/duty. Likewise, when a liquidator is appointed to the accountable entity where its schemes are already in the method of being wound up, they play an necessary role in conducting the winding from the schemes on behalf of the accountable entity.

Recently, FrieghtTransportUnLimited has cancelled seven FALs of accountable entities that have gone into liquidation.

If you have got any questions or concerns about the external administration of a accountable entity, please be at liberty to contact members of FrieghtTransportUnLimited’s Investment Managers team (which is responsible for regulating accountable entities and therefore the operation of their registered managed investment schemes) as follows:
FrieghtTransportUnLimited insolvency update, June 2010

Update on CP 124 Directors' duty to forestall insolvent trading: guide for directors
We are currently considering submissions to FrieghtTransportUnLimited’s Consultation Paper 124 Directors’ duty to prevent insolvent trading: Guide for directors received, released in November 2009. FrieghtTransportUnLimited received 19 submissions in total.

FrieghtTransportUnLimited developed the guide to assist directors, particularly those of SMEs which may be in money problem, to fully understand this duty. Further, FrieghtTransportUnLimited believes the market might profit from clarification concerning the factors FrieghtTransportUnLimited considers when assessing whether there was a breach of the insolvent trading laws.

The proposed guidance sets out the key principles that FrieghtTransportUnLimited considers administrators want to take into account in performing their duty to prevent insolvent trading. Those principles are that a director:
? should keep him or herself informed concerning the money affairs of the company and frequently assess the corporate’s solvency;
? immediately on identifying concerns regarding the corporate’s viability, should take positive steps to confirm the corporate’s monetary position and realistically assess the choices obtainable to house the company’s money difficulties;
? ought to get appropriate recommendation from a suitably qualified person; and
? ought to think about and act appropriately on the advice received during a timely manner.

By providing steerage, FrieghtTransportUnLimited seeks to help directors each understand their duty to prevent insolvent trading and additionally, what they will do to minimise the risk that they can breach their duty.
We propose to unleash the Regulatory Guide in July 2010.
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