Insolvency & Restructuring Disputes — Sydney
In insolvency disputes, the calendar is the battlefield.
A statutory demand gives a company 21 days — not one more — before it is presumed insolvent. A director penalty notice gives a director 21 days before personal liability locks in. Miss either and your options collapse.
Heathfield Grosvenor acts for creditors enforcing their rights and for companies and directors defending them, in the Supreme Court of NSW and the Federal Court of Australia. The lawyer you meet at the first conference is the senior litigator who runs your matter. Call +61 2 9358 5527 — same-day advice on any insolvency document.
For Creditors — Turning Debts Into Recoveries
We prepare and serve statutory demands under s 459E of the Corporations Act correctly the first time — a defective demand hands the debtor a set-aside application and a costs order against you. Where the presumption of insolvency arises, we bring winding up applications and appear on the return date.
Where the debt is genuinely disputed, a statutory demand is the wrong tool — issuing one anyway invites indemnity costs. We tell you which path fits before you spend, and run debt recovery litigation where that is the better route. We also defend creditors against unfair preference claims brought by liquidators clawing back payments legitimately received.
For Companies & Directors — Defending the Position
Setting aside statutory demands (s 459G): genuine dispute, offsetting claim, or defect in the demand. The 21-day limit is strict and cannot be extended — the application and supporting affidavit must be filed and served within it.
Director penalty notices (DPNs): ATO notices for unpaid PAYG withholding, superannuation and GST. We advise on lockdown versus non-lockdown notices and the narrow paths to remission or defence within the 21 days.
Opposing winding up applications and negotiating with petitioning creditors.
Insolvent trading and safe harbour: protecting directors pursuing a genuine restructure.
Deeds of company arrangement (DOCAs): advising creditors on voting and challenges, and directors on proposals.
Act on the Day the Document Arrives
Most of the damage in this area is done by delay. If a statutory demand, DPN, winding up application or liquidator’s demand has arrived, call the same day: +61 2 9358 5527. A senior litigator will tell you in the first conversation what your deadline is, what your options are, and what each costs. Part of our commercial litigation practice.
Insolvency Law FAQs — Answered
How long do I have to respond to a statutory demand?
Twenty-one days from service — strict, with no extensions. Within that period the company must pay, secure or compound the debt, or file and serve an application to set the demand aside. After 21 days the company is presumed insolvent and can be wound up.
Can a statutory demand be set aside?
Yes — where there is a genuine dispute about the debt, the company has an offsetting claim, the demand is defective and substantial injustice would result, or for other sufficient reason under s 459J. Courts apply a low threshold to what counts as a genuine dispute — but only if you move within the 21 days.
What is a director penalty notice?
An ATO notice making a director personally liable for the company’s unpaid PAYG withholding, superannuation guarantee charge or GST. A standard notice gives 21 days to act; a lockdown DPN — issued where returns were lodged late — gives no escape other than payment. Which type you hold changes everything, so take advice immediately.
Can I be personally liable for my company’s debts?
In defined situations, yes: director penalty notices, insolvent trading claims by a liquidator, personal guarantees, and certain director-related transactions. Early advice — and where applicable the safe harbour regime — materially changes the exposure.
A liquidator is demanding I repay money the company paid me. Do I have to?
Not necessarily. Unfair preference and voidable transaction claims have real defences — good faith, no reasonable grounds to suspect insolvency, running account. Liquidators frequently settle well below the demand when met with a properly argued defence.
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