Not from the company: Liquidators fail to claw back third party payment

Voluntary Administration under Part 5.3A of the Corporations Act 2001 offers Australian companies a formal insolvency process where an independent liquidator investigates whether the business can be preserved. During this process, most unsecured claims are stayed while creditors, employees, and secured parties navigate distinct rights and exceptions. Understanding the strategic timing for directors, the decision-making power of creditors, and the specific protections available to employees proves critical t

Trust structures can protect assets held for others, but they do not shield a bankrupt person's own entitlements, trustee indemnity rights, or transfers made to defeat creditors. The deed, financial records and transaction history determine whether trust property remains outside the bankruptcy estate or becomes available to creditors through beneficial interests, indemnity claims, or voidable transaction recovery.

Under Australia's bankruptcy system, there is no limit on how much income a bankrupt person can earn, though they may be required to make compulsory contributions if their after-tax income exceeds statutory thresholds. This article examines how income contribution calculations work, what thresholds apply based on the number of dependants, and why the system balances creditor interests with maintaining a reasonable standard of living for bankrupt individuals.

An undischarged bankrupt faces strict legal obligations including cooperating with trustees, disclosing all property and financial changes, and obtaining consent before international travel. What are the criminal penalties for breaching these restrictions, and how can early disclosure and proper legal advice help navigate trustee negotiations more effectively than denial or delay?

Bankruptcy trustees can challenge pre-bankruptcy transactions under sections 120, 121, and 122 of the Bankruptcy Act 1966, targeting undervalued transfers, creditor-defeating arrangements, and preferential payments. Understanding the statutory tests, timing rules, and evidentiary requirements is essential for recipients facing clawback demands, as market value alone does not guarantee protection and poor documentation can prove decisive.

When a creditor seeks to make an individual bankrupt through a sequestration order, the process involves strict statutory requirements including judgment thresholds, bankruptcy notices, and court scrutiny. Understanding the procedural steps, potential defects, and strategic alternatives is essential for both creditors pursuing debt recovery and debtors facing insolvency proceedings.

A statutory demand is one of the fastest and most powerful tools for recovering undisputed debts from Australian companies, engaging insolvency provisions that give debtors just 21 days to respond. While it creates significant commercial pressure that often leads to payment or negotiated resolution, it must be used carefully for genuinely undisputed debts to avoid being set aside and incurring adverse costs.

Small business restructuring under Part 5.3B of the Corporations Act 2001 offers eligible insolvent companies with liabilities under $1 million a streamlined path to propose creditor compromises...

Bankruptcy restrictions in Australia govern what undischarged bankrupts can and cannot do during the typical three-year bankruptcy period. While most people can continue working and earning income, they must obtain written trustee consent before overseas travel, disclose bankruptcy for transactions above the indexed threshold, and refrain from managing corporations without court leave. Understanding these restrictions—from employment and business operations to credit disclosure and asset dealings̵

Asset protection during bankruptcy depends on genuine ownership, not trust labels. Property held for others is generally excluded from a bankrupt estate, but beneficial interests, trust debts, and trustee indemnities may still be recoverable. Transfers into trusts can be challenged under undervalue or creditor-defeating provisions if timing, consideration, and purpose raise concerns.

Australia's privacy regulator has issued final guidance on new transparency obligations for automated decision-making systems. From December 2026, organisations using computer programs—including AI, algorithms, and everyday software—to make or inform significant decisions about individuals must disclose these practices in their privacy policies. The guidance reveals a broader compliance burden than many expect, particularly for businesses using automated tools across recruitment, pricing, credit

The Australian Government's exposure draft proposes a proactive, systems-based digital duty of care for online service providers, requiring them to ensure a 'safe online environment' so far as reasonably practicable.

Australia's Privacy Act reform has reached a critical milestone with the release of exposure draft legislation proposing fundamental changes to how organisations handle personal information. The reforms introduce a new 'fair and reasonable' test for data collection and use, a right of erasure for large digital platforms, strengthened consent standards, a statutory controller/processor framework, restrictions on trading personal data, and enhanced data breach obligations. These changes come at a time when em

The Australian Taxation Office has issued its final ruling on cross-border software payments, dramatically expanding what constitutes a royalty subject to withholding tax. With retroactive application to July 2021 and a broad interpretation of copyright law, multinational companies face significant compliance risks and potential exposure across software distribution, cloud services, and digital intermediation arrangements.

Australia's digital regulatory landscape is undergoing a fundamental transformation, with the proposed digital duty of care joining a complex web of reforms including Privacy Act amendments...

Australia's Department of Climate Change, Energy, the Environment and Water has released consultation papers outlining the regulatory framework for the final phase of environmental protection reforms under the EPBC Act. With submissions closing on 13 October 2026 and implementation scheduled for 1 December 2026, these reforms will fundamentally reshape how projects are assessed and approved, introducing streamlined pathways...

APRA and ASIC have issued coordinated guidance on frontier AI risks, requiring financial services boards to demonstrate direct oversight of AI governance, cyber resilience and third-party dependencies. The regulators' expectations build on existing prudential standards and directors' duties, with enforcement signals indicating that proportionate action must be taken before incidents occur.

The NSW Government has released a comprehensive data centre policy framework establishing new guidelines for electricity network connections, planning approvals, and environmental standards. These reforms require data centres to contribute to network infrastructure costs, procure renewable energy, and demonstrate demand flexibility while offering streamlined approval pathways for compliant projects.

The Court of Appeal has upheld a landmark decision requiring the Australian Tax Office to return settlement payments totaling approximately $15 million that were funded by proceeds from a breach of fiduciary duty.

Prime Minister Albanese's speech on 15 July 2026 marked a decisive shift in Australia's approach to artificial intelligence, from voluntary guidance to mandatory national regulation. The announcement establishes Australian Standards for AI, copyright licensing requirements, a national planning framework for data centres, energy obligations, and workplace protections—all underpinned by the concept of sovereign AI.