Gavin Rakoczy

Gavin Rakoczy

Gavin is a Special Counsel in the Restructuring and Insolvency team, based in Sydney.

He has extensive experience advising clients in relation to restructuring and insolvency-related matters and has been involved in many of Australia’s most complex insolvencies and distressed corporate situations.

Gavin's skillset covers the full gamut of corporate distress, insolvency and restructuring, including informal solvent workouts, advising boards concerning insolvent trading risk, security enforcement strategies, voidable transaction risk, and formal restructuring options.  Gavin has particular expertise with regards deeds of company arrangement, having drafted some of Australia’s most complex and innovative deeds of company arrangement. Gavin also has extensive experience in the negotiation and drafting of a range of commercial agreements, including forbearance agreements and standstills, settlement deeds, implementation deeds, recapitalisation agreements, trust instruments, asset sale agreements, and off-take agreements.

His other areas of expertise include contractual disputes, Competition and Consumer Act (formerly the Trade Practices Act) matters, property disputes, equitable and trust issues and Corporations Act matters (including director's duties).

Recent distressed situations in which Gavin has had a key role include:

  • Arrium recovery proceedings – current co-lead in proceedings in the Supreme Court of NSW by three of the Arrium financiers seeking +$100m in damages from certain directors of the Arrium Group, involving alleged misleading and deceptive conduct arising from representations and warranties as to solvency and the absence of an MAE in drawdown notices which the defendants are asserted to have caused to be issued.  The proceedings concern highly novel and market-moving issues of solvency (involving insolvency arising from long-term liabilities) and director/officer personal liability for drawdowns.
  • Virgin – key role advising the lessors and financiers of circa 100 aircraft to the Virgin Group (owed ~$3.5B) concerning the implications of the collapse of Virgin and subsequent recapitalisation efforts and a range of associated complex legal and strategic issues, including interplay of administrators’ statutory and equitable liens with the claims of secured creditors and lessors, ability of administrators to compulsorily retain and utilise leased aircraft while paying no or materially reduced rent, and implications of multiple applications by administrators to alter Part 5.3A regime.
  • Encore – co-lead role advising administrators and subsequently liquidators concerning the collapse of Encore, a provider of foreign exchange risk management and global payment services.  Following the appointment of administrators, a number of creditors advanced claims that certain mixed proceeds accounts contained funds held on trust for the creditors pursuant to general trust law and Chapter 7 of the Corporations Act 2001 (Cth).  As recorded in the decision of Nikitins (Liquidator) v EncoreFX (Australia) Pty Ltd (in liq) [2020] FCA 1189, the administrators (advised by KWM) adopted a novel approach where orders were obtained that, absent a creditor obtaining leave to be joined, the administrators were justified in treating the allegedly mixed trust and non-trust funds as funds generally available to creditors (effectively as non-trust funds). 
  • Surfstitch – lead role advising administrators and deed administrators on unique interplay between the Surfstitch deeds of company arrangement and two separate class actions against Surfstitch, including distribution of proceeds to shareholder creditors. Following extensive negotiations and a number of (often contested) hearings, the matter was finally resolved as recorded in TW McConnell Pty Ltd as trustee for the McConnell Superannuation Fund v SurfStitch Group Ltd (administrators appointed) (No 4); Nakali Pty Ltd v SurfStitch Group Ltd [2021] NSWSC 121.
  • RCR – administrators and liquidators on a variety of complex legal issues and various legal proceedings, including application for directions on classification of work-in-progress, bonds and other assets as circulating or non-circulating with potential wide-ranging ramifications for Australian insolvencies;
  • Arrium insolvency – consortium of lenders owed +$3B on negotiation of market-moving deeds of company arrangement and successful defence of proceedings brought by trade creditor insurers in relation to distribution of proceeds from sale of overseas assets. 
  • Paladin Energy – company on solvent restructuring proposals, and administrators and deed administrators on negotiations for complex restructure and recapitalisation via deed of company arrangement and associated contested section 444GA Court application for transfer of shares;
  • Alita Resources – administrators and deed administrators on restructuring through deed of company arrangement and associated section 444GA application for the transfer of shares to the proponent by Singaporean and Australian shareholders; 
  • Angas Securities – Trust Company as trustee for debenture holders, including on heavily litigated debenture fund run-off process and subsequent creditors’ scheme of arrangement to restructure rights and obligations of Angas, Trust Company and debenture holders;
  • McAleese – administrators and deed administrators on restructure of Group via three innovative deeds of company arrangement and related suite of agreements to facilitate separation of viable and non-viable businesses within Group. 

Professional Memberships

  • Turnaround Management Association (TMA)
  • Law Society of NSW
  • Business Law Section of Law Council of Australia
  • Regular presenter on R&I issues including to the Asia Pacific Loan Market Association

Location

Legal insights

This article was written by Tim Klineberg and Gavin Rakoczy. The issue The priority of secured creditors to receive distributions out of secured assets is heavily entrenched in the Australian...

17 June 2020

This article was written by Gavin Rakoczy. Administration and deeds of company arrangement have continued to have significant influence on major restructurings in the Australian market.  In...

03 October 2018

This site uses cookies to enhance your experience and to help us improve the site. Please see our Privacy Policy for further information. If you continue without changing your settings, we will assume that you are happy to receive these cookies. You can change your cookie settings at any time.

For more information on which cookies we use then please refer to our Cookie Policy.