Lane (Trustee), in the matter of Lee (Bankrupt) v Deputy Commissioner of Taxation [2017] FCA 953

BANKRUPTCY AND INSOLVENCY – trustee in bankruptcy’s right to insolvent trustee’s right of exoneration – discussion of the nature of the right of exoneration – whether the funds are to be distributed to all creditors or only to trust creditors – whether right of indemnity “property divisible among the bankrupt’s creditors” or trust property 

BANKRUPTCY AND INSOLVENCY – trustee’s right of indemnity – whether bankruptcy changed the nature of the right of exoneration – whether the priority regime in s 109 of the Bankruptcy Act 1966 (Cth) applies to the use of the right of exoneration – trust creditors paid pari passu – whether the right of exoneration ought to be exhausted before dividends are paid – “hotchpot” principle considered

BANKRUPTCY AND INSOLVENCY – costs expenses and remuneration of trustee in bankruptcy – use of the right of indemnity to meet the costs expenses and remuneration of bankruptcy trustee – consideration of Berkeley Applegate principles – consideration of Universal Distributing principles – reasonableness of remuneration of trustee

TRUSTS AND TRUSTEES – trustee’s right of indemnity – nature of the trustee’s right of indemnity – trustee’s equitable lien supporting the right of exoneration – whether trustee’s right of indemnity is trust property. Click here