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ARTICLE · 20 AUGUST 2019

Federal Court Instructs That Liquidators Should Appoint A Receiver When Dealing With An Insolvent Corporate Trustee

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When a liquidator is appointed to an insolvent corporate trustee, the liquidator should seek appointment as a receiver.

AustraliaInsolvency/Bankruptcy/Re-Structuring
Cameron Cheetham
Cameron Cheetham
Craig Ensor
Craig Ensor
Felicity Healy
Felicity Healy
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This week's TGIF considers the Federal Court decisions in Carrello, in the matter of Caneland Holdings Pty Ltd (in liq) [2019] FCA 1144, and Carrello, in the matter of Gembrook Investments Pty Ltd (in liq) [2019] FCA 1143. The Court provided guidance as to how a liquidator of an insolvent corporate trustee should ensure payment of their remuneration and expenses out of trust assets.

Background

Mr Giovanni Carrello was appointed as the liquidator of Gembrook Investments Pty Ltd (in liq) (Gembrook) which was the trustee of the Bailey Family Trust. Mr Carrello was also appointed as the liquidator of Caneland Holdings Pty Ltd (in liq) (Caneland) which was the trustee of the Sutherland Family Trust. Both Gembrook and Caneland had insufficient funds to pay creditor claims.

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