Someone government person called Andrew is saying that the insolvent trading protections for directors will be extended beyond 25 September 2020? https://www.skynews.com.au/details/_6178269074001
Is the Australian government around to advise?
Incapacity of our laws
Assuming for the moment that this is is the case, the government may be conceding that the capacity of the insolvency laws to serve what is anticipated to be a very large number of corporate and personal insolvencies may be found wanting.
Extending the insolvency protections will stave off that influx and any focus on the inadequacies of the system.
Though the government does have an insolvency tsunami plan, pre-virus, announced in 2016 when it introduced the new insolvency laws.
That plan acknowledged that there are many corporate failures with limited or no remaining assets – which invariably constitute the majority, more so now.
The cost of winding them up should be paid for by the creditors: see Explanatory Memorandum to the Insolvency Law Reform Bill 2015.
If the creditors do not want to do that, the insolvent business could simply go through an ASIC deregistration process, a process the government has accepted might become increasingly used.
As the law says, a deregistered company then ‘ceases to exist’ – tax and other government debts and all.
But, I speculate ….
It might be best to hear from the government first.