10 December 2009

Octaviar Ltd (No. 7) – crisis averted?

The widely publicised Queensland Supreme Court decision of Re Octaviar Ltd created shockwaves in legal and financial circles by calling into question well established market practice as to when a charger must notify ASIC of variations to a registered charge. Overnight, many secured lenders found themselves at risk of existing charges being void in an insolvency situation to the extent that any increase in the underlying debt or liabilities secured by the charge had not been duly notified to the Australian Securities and Investments Commission. This much criticised decision has now been decisively overturned by the unanimous decision of the Queensland Court of Appeal, to the momentary relief of many secured lenders. However, the filing of an application for special leave to appeal to the High Court means that market practice has not reverted to the pre-Octaviar position and the issues raised by the first instance decision are far from settled. Media contacts: Peter Slattery, Managing Partner Phone. +61 8 8239 7114 Mobile. +61 419 819 348 Email. peter.slattery@jws.com.au Andrea Shaw, Communications Manager Phone. +61 8 8239 7148 Mobile. +61 412 711 966 Email. andrea.shaw@jws.com.au

Download: Octaviar.pdf (120 Kb)

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