Priority and the circulating security interest: timing is everything

What you need to know

• The Federal Court has clarified that when a receiver receives property after their appointment and that property is not produced in a company's ordinary course of business, it will not be subject to the obligation to pay the company's other priority creditors, as provided by section 433 of the Corporations Act 2001 (Cth).
• The decision issued this week confirms that trading profits generated by a receiver, as well as payments that become payable to a company consequent upon its insolvency, will not be property created in the ordinary course of business.