I’ve just read an 'excited' article by The Australian,
entitled “Clive Palmer firms jump queue
of creditors for Queensland Nickel” which you can read here (although you
may get caught out by The Australian’s paywall).
The meat of the article concerns the ‘last minute’
registration on the PPSR of security interests against Queensland Nickel by
companies in which Clive Palmer has an interest.
“Four days before Clive Palmer’s Queensland Nickel Industries collapsed into voluntary administration, two of his companies staked a claim on all of the refinery’s assets in an apparent attempt to squeeze out redundant workers and other creditors.”
The article goes on
to say that,
“Legal experts said the manoeuvre could disadvantage sacked workers, already furious at being denied access to their redundancy entitlements.”
Apparently, The
Australian and its ‘legal experts’ are not especially familiar with the
workings of the PPSA or the Corporations Act once insolvency practitioners
become involved.
Firstly, any
creditor who had lodged a security interest on the PPSR prior to Palmer’s
recent registrations will benefit from greater priority under the PPSA (at
least a dozen of which were registered under the facilities that I personally oversee).
But, perhaps more
importantly, in the context of The Australian’s article, are the implications
of the Corporations Act for security interests registered within 6 months of a
company failure.
While I’ve previously
explored this at some length in my post ‘The PPSA vs The Corporations Act’, the
short version is that 588FL of the Corporations Act provides a very clear
deadline by which a registration needs to be lodged in order to be effective
against a liquidator.
If a registration
was not lodged within 20 business days of the security interest coming into
force or was lodged during the 6 months leading up to the liquidator’s
appointment, then “The PPSA security interest vests in the company” and
the creditor’s security rights are effectively lost.
So, while opportunistic, last minute registrations may make
for a relatively entertaining news story, they don’t make for very effective
security.
