Melbourne Law School - Theses
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ItemLiability for insolvent group companies in Australia : regulatory regimes and reform proposals(University of Melbourne, 2002)This thesis considers the situation where one or more companies in a corporate group becomes insolvent or is wound up. It examines the remedies available to minority shareholders and creditors. It also examines the liability of (i) directors of a subsidiary, (ii) a parent company or affiliate within the group, (iii) directors of a parent or affiliate companies within the group, and (iv) lenders. A consideration of the rights and liabilities of these various parties is made in the context of an examination of the adequacy of Australian law to deal with certain harmful governance practices that may occur in a group. In order to measure the adequacy of existing Australian regimes in tackling certain harmful governance practices, a multistage process is undertaken. This process involves identifying in chapter 2 the different constituencies involved in a corporate group. These are minority and majority shareholders, managers of group companies, involuntary and voluntary creditors. Chapter 2 also identifies and examines specific harmful governance practices that may occur in a corporate group and the prejudicial impact that these practices have on minority shareholders and involuntary creditors. Chapter 3 builds on the framework established in chapter 2 by considering whether the Australian regulatory regime adequately protects the interests of minority shareholders and involuntary creditors against the harmful governance practices identified in chapter 2. This task involves a consideration of the following questions: (i) which regimes impact on the identified harmful practices that may occur in a group? (ii) on whom does the law impose liability? and how is liability imposed? (iii) which constituency is the provision most likely to protect? (iv) does the provision adequately protect the constituency from the particular harmful governance practice that may occur within a group? Deficiencies in the current regulatory regime are identified in chapter 3. Chapter 4 considers whether the proposals for reform recommended by the Companies and Securities Advisory Committee (CASAC) in its final report removes these deficiencies. Chapter 5 considers the German regime with regard to particular issues arising from CASAC's proposals and chapter 6 sets out the writer's conclusions and recommendations for reform to the Corporations Law.
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ItemThe regulation of essential service insolvencies and the public interest : case studies of Australia's electricity industry and Melbourne's public transport industry( 2007)This thesis critically explores the regulation of the insolvency of essential services and the public interest through an examination of the common law and legislative responses in Australia, the United Kingdom and the United States. Drawing on understandings of the public interest gained from its analysis the thesis proposes a model of the public interest that may be used to justify representation of non-creditor interests within insolvency proceedings of essential services. The model also identifies non-creditor public interest considerations that extend beyond continuity of supply. The thesis then undertakes case studies of the regulation of insolvency within the Australian electricity industry and Melbourne's public transport industry to examine how effectively public interest issues have been addressed and how these are balanced against the interests of the firm and its creditors. The thesis argues that a fundamental problem of the regulation of insolvent essential services is balancing the general public's interest in the fate of the insolvent firm with the interests of others stakeholders, particularly creditors. The thesis demonstrates there is a great deal of inconsistency of response to this issue both within and between the jurisdictions under consideration. Focussing on the public interest in the continuity of supply, the United Kingdom has enacted ad hoc insolvency procedures which are initiated by the state and oust creditor control mainly in relation to the monopoly sector of various essential services. A different approach in the United States has meant public interest considerations are built into its insolvency law through a combination of legislative prescription, judicial interpretation of the Bankruptcy Code and a limited willingness to grant non-creditor representation rights in insolvency proceedings of essential services. The thesis argues that the integration model of the United States allows an appropriate balance to be struck between the interests of the firm and its creditors and the broader public interest when regulating the insolvency of essential services. In contrast Australia has not enacted ad hoc insolvency procedures or expressly integrated the public interest within its insolvency law. The case study of the Australian electricity industry shows, however, that the public interest in the continuity of supply is managed by allowing creditors' rights to be affected radically by utilities regulation such a state step-in rights and retailer of last regulation. The thesis demonstrates the fragmented and inconsistent nature of these provisions. The case study of Melbourne's train and tram industry and the examination of South Australia's privatisation of its electricity assets by way of lease show the ways in which private contracting rather than utilities regulation can manage public interest issues. The thesis concludes that while the public's interest in the continuity of supply of essential services in Australia is generally satisfactorily dealt with under current arrangements, what is less clear is whether public interest issues beyond continuity of supply will be given sufficient weight in insolvency proceedings, particularly in the context of a reorganising firm. The thesis argues it is within this area that there is space for integrating public interest considerations within Australia's insolvency law by expressly requiring the court to consider the public interest in such proceedings. Incorporating public interest considerations that recognise non-creditor stakeholder interests into Australian insolvency law requires theoretical justification. The thesis argues there are sound theoretical arguments for expanding insolvency's law role to accommodate broader stakeholder interests in the context of the insolvency of essential services and that the model of the public interest proposed by the thesis may be used as a basis for a court to grant representation rights to non-creditor interests within insolvency proceedings of essential services in Australia.