For modern businesses, multinational operations offer strong opportunities for growth and expansion. However, in the event of insolvency, operating across a number of jurisdictions often results in costly and time consuming complications.

The Cross-Border Insolvency Act 2008 (Cth) (CBI) provides a framework for cross-border insolvencies which aims to facilitate cooperation and coordination.

The capacity of the CBI to facilitate efficient and cost-effective administrations across jurisdictions is evident in the recent decision of the Federal Court of Australia In the matter of Coin Co International plc (Administrators Appointed) [2015] FCA 354.

Coin Co was a registered company in the UK. It operated a multinational business of foreign coin exchange, including in Australia where the business was conducted via  a registrable foreign body.

The administrators appointed to Coin Co in the UK sought to wind up the Australian business by appointing Australian insolvency practitioners. To that end, the liquidators sought orders that the proceedings be recognised as a ‘foreign main proceeding’ for the purpose of s11 and s16 of the CBI.

The court made those orders, meaning all powers normally available to liquidators were made available to the Australian representatives as if they had been appointed as liquidators under the Corporations Act.  Accordingly, the realisation of all of Coin Co’s Australian assets were entrusted to the Australian insolvency practitioners appointed by the UK administrators.

This facilitated a more cost-effective and efficient administration, allowing Cost Co’s assets to be realised by practitioners who were experienced with Australian insolvency law and familiar with the procedural rules of Australian courts, which hopefully results in a higher return to creditors.

For more information contact us.