The Federal Court of Australia has recently handed down an important decision which clarifies that insolvency practitioners must, subject to limited exceptions, maintain separate bank accounts for each insolvency appointment.
Worrell, in the matter of regulation 5.6.06 of the Corporations Regulations 2001  FCA 934 dealt with the way in which insolvency practitioners should open/maintain bank accounts in a liquidation and a receivership.
The court held that:
- the proper construction of regulation 5.6.06(1) is that separate accounts are contemplated for each corporate liquidation;
- regulation 5.6.06(2) provides an exception to the above where the corporation is part of a group, in which case one account can be opened and maintained for the group;
- the court can make an order, or the committee of creditors may approve, the liquidator in a particular liquidation not opening such an account. However, neither the court nor the committee of creditors can approve the establishment of a compound account or special account in respect of appointments yet to be made;
- insolvency practitioners cannot maintain a single compound account for all appointments;
- in the case of receivers and managers, s421(1)(a) of the Corporations Act 2001 (Cth) plainly requires receivers and managers to open and maintain a separate bank account and to ensure that no such account contains money other than money of the corporation in question; and
- the requirements of s421(1)(a) do not apply to 'mere receivers', that is controllers not exercising powers in connection with the management of the corporation.