*Please note that the links to the content in this Part will direct you to Westlaw AU. If you are still using Legal Online, the links can be found in the LOLA PDF at the bottom of this post.
The latest issue of the Company and Securities Law Journal (Volume 31 Part 2) contains the following material:
Directors’ duties to creditors: Walker v Wimborne revisited – Rebecca Maslen- Stannage
In the 30-plus years since Mason J’s iconic judgment in Walker v Wimborne (1976) 137 CLR 1, his Honour’s statement that directors of distressed companies must take into account the interests of creditors has been much analysed and interpreted. Recently this interpretation has taken an alarming turn towards a direct duty owed to individual creditors. To interpret the duty in that way would both depart from sound authority and cut across solvent reconstruction efforts which benefit companies and their stakeholders, including creditors. This issue is in particularly sharp focus since the recent arrival in Australia of “loan to own” investors who buy distressed debt and seek solvent reconstruction rather than insolvency processes. If the original manifestation of Walker v Wimborne – Mason J’s simple statement – is applied, the right balance is struck between the interests of companies and their creditors. Furthermore, to avoid undermining appropriate solvent reconstruction efforts, insolvent trading laws should be reformed. …… 76
Crowd funding: Regulating the new phenomenon – Terence W Wong
The rise of social media has driven rapid growth in a new phenomenon known as crowd funding. Crowd funding sources venture capital from the internet rather than from an established capital market or financier, and has in a sense become a new “capital market”. It allows entrepreneurs to quickly, and at low cost, raise substantial amounts of capital from millions of internet users attracted to a great idea. This article suggests that crowd funding is incompatible with Australia’s current laws, and that specific regulations for crowd funding should be introduced in Australia so that it does not become confused with other investment and fundraising methods. This must be done to protect and nurture the vast untapped potential of crowd funding, to compete with the global crowd funding market, and ultimately to encourage new products and services to be created in Australia.
TAKEOVERS AND PUBLIC SECURITIES – Simon McKeon and Jonathan Farrer
- The rise of contingent value rights in Australian M&A transactions – Alex Brown and Sarah Duerdoth
CURRENT DEVELOPMENTS – LEGAL AND ADMINISTRATIVE – Herbert Smith Freehills
- The Co-operatives National Law: A new opportunity for co-operative social enterprise in Australia? Part II – Daniel Wiseman
- Regulating insider dealing in Hong Kong: Challenges and the road ahead for enforcement and prosecution – Charles KN Lam and SH Goo