Hip-Pocket Injuries in Workouts: Accessory Liability for Bankers and Advisers

Abstract

In this conference paper Justice Austin describes current Australian trends in corporate workouts, where a financier such as a bank wishes to assist a corporation in financial difficulty, without making use of any process of external administration. He identifies some legal pitfalls in informal workouts, including the law concerning de facto and shadow directorships (which may lead to liability for the financier under the law of insolvent trading), and the law of accessory and primary statutory liability for misleading conduct and non-disclosure. He analyses the Australian law, noting some parts of the current Australian definition of "director" that might increase the likelihood of liability for a financier, beyond the level of liability identified in the English case law.