Dont sweat the small stuff - Let the courts help resolve uncertainty for insolvency practitioners

This week's TGIF considers some ways insolvency practitioners can make their lives easier by proactively using the courts to resolve uncertainty – such as liquidators seeking appointment as receivers of trust property as in the recent Federal Court decision of Freeman; In the matter of Blue Oasis Holdings Pty Ltd [2018] FCA 822.

WHAT HAPPENED?

Liquidators were appointed to the corporate trustee of a family trust.

As is often the case, the trust deed provided that because of that appointment, the trustee was removed from its position as trustee. No new trustee was appointed in the company's place.

THE PROBLEM OF UNCERTAINTY

The liquidators needed to realise the assets of the trust so that they could be applied in satisfaction of claims that the former trustee company had incurred in its capacity as trustee.