Thought Leadership Series

Occasional Paper on Trusts and Insolvency

Trusts and insolvency can make uncomfortable partners; this is even more the case when accountants and lawyers specialising in one filed or the other misunderstand the rights and consequences of the interaction of insolvency and trust law.

This paper reviews trust, and important form of business organisation, and then considers both the theoretical and practical consequences of their interaction with common forms of insolvency administration.

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August 2009 - Reconstruction and the Non-Commercial Sector.

The non-commercial sector is a significant part of Australia's economic and social life.

If Australian experience of the 2008-2009 recession follows that of the UK (which enrtered recession before Australia), many non-commercial organisations will see unexpected declines in income which will  require the identification of appropriate strategies for turnaround.

The legal structures adopted by organisations in the sector are often unfamiliar to Insolvency Practicioners. The issues requiring reconstruction assistance in non-commercial organisations include those encountered in commercial organisations as well others, typically the result of weaker controls and reporting requirements.

The legal environment for reconstruction often differs from the environment for commercial reconstruction; the main differences are identified and considered.

This paper, the first in our 'Thought Leadership' series surveys issues that arise in the context of reconstruction engagements relating to non-commercial entities.

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November 2009 An Introduction to the Taxation Effects of External Administration

This paper has been prepared to give an overview of the taxation consequences of distributions in insolvent liquidations and in solvent liquidations. 

Like many other areas of tax law, the provisions dealing with distributions in external administration are complex and require a detailed understanding of the interaction of the law on the one hand, and a careful analysis of the history of the commercial transactions of the taxpayer company. The legal provisions and are located across a wide range of the provisions of tax legislation.

As this paper is intended to be read by non-specialist practitioners, I have omitted reference to certain issues likely to arise only in the case of very large companies, or those with very complex taxation affairs. In particular I have omitted reference to non-commercial debt defeasance; the taxation consequences of debt for equity swaps; and rules applicable to limited recourse lending.

None is likely to complicate greatly the tax position of a liquidation, although they may be relevant in the case of reconstruction and to the position of holders of interests in a liquidation such as creditors and members.

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