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Asset protection and trusts in insolvency presentation

Published on 26 Jul 12 by VICTORIAN DIVISION, THE TAX INSTITUTE

The sanctity of the discretionary trust as a vehicle for the protection of family wealth is rarely questioned. Yet Australian courts have been prepared to make, at least on an interim basis, orders in proceedings freezing trust assets where its controller becomes insolvent. While it has been some time since the Richstar case in 2006 more recently the Federal Court of Australia in Rafferty v Time 2000 West Pty Ltd (No.9) was prepared to make a freezing order over the exercise of the power to change a trustee of a discretionary trust. During the same period the 2006 Bankruptcy Act amendments, intended to provide greater access for creditors to family wealth generated by the bankrupt, remain largely untested. This presentation reviews the current state of play as to the means by which insolvency practitioners continue to seek to access wealth contained within trust structures and consider how effective they in fact are.

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Author Photo - Michael Lhuede
Michael Lhuede
Michael specialises in corporate and personal insolvency law. Michael acts for Australia's leading banks and secured lenders and for liquidators,administrators and receivers advising in all aspects of corporate insolvency and workouts. He has also conducted some of Australia’s most complex bankruptcy cases. Michael regularly advises boards and directors of listed and unlisted companies in relation to their duties upon insolvency and the restructuring of financially stressed businesses. For the past four years Michael has been named in "Best Lawyers •Australia" in the Insolvency and Reorganisation category, being named Best Lawyer •Victoria for that category in 2012. He is a member of the Insolvency Practitioners Association of Australia and of the Insolvency & Reconstruction Committee of the Law Council of Australia and the co-author of a chapter of Personal Property Securities in Australia published by Lexis Nexis. Current at 27 July 2012 Click here to expand/collapse more articles by Michael LHUEDE.
 
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Asset protection and trusts in insolvency

Author(s):  Michael LHUEDE

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