Bankruptcy workflow
How does a person end up in bankruptcy? Perhaps surprisingly the road to bankruptcy is a long one and requires many court filings before adjudication occurs. Firstly, judgment needs to be obtained against the person. This in itself is an entire legal proceeding which can take many years if complex. The judgment obtained is not […]
Cross-border insolvency in New Zealand: an overview
Cross-border insolvency refers to situations where insolvency proceedings implicate multiple jurisdictions. Even though foreign creditors may have a security interest recognised in their jurisdiction, they must ensure that their interest is perfected under New Zealand legislation to retain priority over other creditors. Recognition of proceedings may not be unilateral: New Zealand recognises foreign proceedings, but […]
Receivership, a broad overview
Introduction A receivership is an appointment made by a secured lender (typically a bank or finance company) who have a security in assets of the debtor company. Almost all receiverships are appointed by secured creditors who have a General Security Agreement (GSA) granting the finance company a security interest in all present and after acquired […]
Directors’ duties to insolvent companies, and the risks
Directors of insolvent companies who fail in their duties, may be held personally liable for losses caused by their actions or injurious omissions. Insolvent companies Firstly, when is a company insolvent? The Companies Act 1993 (the Act) defines a solvent company, using two limbs as when: However, some cases indicate that the primary consideration is […]
NZ business incorporation rate slowdown signals looming surge in liquidations
Statistics indicate a slowing growth rate of registered companies in New Zealand, predicting a potential rise in liquidations. Recent economic and business data reveal a complex landscape for New Zealand businesses. Business indexes such as the Performance of Services Index (PSI) and the Performance of Manufacturing Index (PMI) showed significant weaknesses in June 2024 not […]
Employees of a liquidated company
Many employees have concerns about the company they work for going into liquidation, and whether outstanding salaries will ever be paid. Unfortunately, this is a growing worry among New Zealanders because of the increasing number of national liquidations, largely attributable to the grim economic down-turn post covid. You should know your rights and entitlements should […]
Du Val – Statutory management in context
The director of the Du Val group, Kenyon Clarke, promoted an enviable image of opulence and glamour. Private jets, super cars, champagne and an attempt at a self-funded reality show. Understandably, the recent announcement of Du Val entering statutory management has been a hot topic in the media. So, what is statutory management and was […]
Benefits of a general security agreement
A General Security Agreement (GSA) is a contract between a lender (creditor) and borrower (debtor) providing security to the lender over a borrower’s personal property. In the case of a breach of contract, the lender will have rights in relation to the outlined property. There are several benefits to a GSA, which makes it an […]
Wholesale property development funds in New Zealand: A cautionary guide
Investing in wholesale property development funds can seem like an attractive opportunity. These funds promise returns that are generally higher than term deposit rates, making them attractive to investors seeking better yields. However, it is crucial to understand that these returns are often low compared to the substantial risks they carry. Investors must be aware […]
Hive down: The wrong way, and the right way
Hiving down is a corporate rescue technique which originated in England in the 1950s, the rules for which have been established in New Zealand by several pieces of case law* The term originates from the practice of creating a new honeybee colony, by moving some bees and honey to a new hive. For companies, it is […]
