Market overview

Welcome to the 2023 edition of "From Red to Black", our annual review of significant developments and topical issues in the Australian restructuring and insolvency market.

After a relatively slow start in restructuring and insolvency activity in early 2023, we are now seeing real activity across a number of sectors including construction, transport and logistics, retail, gig-economy delivery providers and the buy-now-pay-later sectors. Inflation, constrained liquidity, under-pressure management and margins which are being critically squeezed without the support of a strong economy will ultimately lead to distress. Proactive debtors (and supportive creditors) will enhance the prospects of restructure. For others, formal insolvency appointments are likely to follow.

Inflation, constrained liquidity, under-pressure management and squeezed margins will ultimately lead to distress.

This edition of From Red to Black examines some of the key themes we are seeing in the Australian market. A series of recent decisions involving the retention of leased property in voluntary administrations may impact commercial landlords according to Orla McCoy, Mikhail Glavac and Tom Gardner. Scott Sharry, Caitlin McConnel and Angus Fraser consider the UK Supreme Court decision of Sequana and its consequences for the way the existence and content of a “creditor duty” affecting Australian company directors is considered in the future. A very real ESG issue is considered by Nick Poole, Jonathon McRostie and Anthony Burke in their review of recent Victorian decisions which considered, and rejected, attempts by insolvency practitioners to disclaim onerous property and contaminated land. From risk to reward: Cameron Belyea and Melissa Ferreira in Perth unpack the key sources of alternative finance in Australian mining and set out the basic features, advantages and disadvantages of each. Finally, turning the ship back to Sydney, Tim Sackar, Madeleine McCloy and Jonathon Stuchbery look at control transactions, in particular the growing popularity of deeds of company arrangement which involve a "section 444GA" share transfer and examine recent caselaw involving challenges to such transfers.

We are grateful to our clients for giving us the opportunity to work on the exciting mandates which enable us to operate at the cutting edge of our industry. A number of those roles are featured in or underpin the topics discussed in this year's From Red to Black. We hope you enjoy reading this as much as we enjoyed the voyage!