ARITA, TMA [1] and others in the business restructuring field have protested about the impact of the new merger laws on corporate restructuring, in that they require any restructuring that meets the relevant notification thresholds to be notified to the ACCC.[2] The timing of the ACCC decision would potentially extend past the statutory period in which voluntary administrations are to proceed.
This new law in fact “risks killing company rescues”.[3]
That may well be a valid point under current restructuring law but from a broader perspective, there may be a case for particular types of restructurings to be subject to closer market-based scrutiny. It’s not all about the restructured company and its creditors.
Overseas literature has examined this in some detail, comparing competition law’s medium to long-term economic and public interest perspective with the short sharp focus of insolvency law to produce an outcome acceptable only to the then creditors, but with no necessary focus beyond that.[4]
The primary and rather limited object under Part 5.3A of the Corporations Act 2001 is to maximise “the chances of the company, or as much as possible of its business, continuing in existence” etc.
After ensuring the company’s existence, insolvency law has no formal role or focus in determining the outcome of its “successful” restructure — how the newly refurbished company has fitted back in the market, whether it has in fact survived and flourished, or what negative or positive competition outcomes it might have produced.
The Harmer Report itself expressed only modest “salvage” expectations of the Part 5.3A regime saying at [53], that
“(i)t will be worthwhile and a considerable advantage over present procedures if it saves or provides better opportunities to salvage even a small percentage of the companies which, under the present procedures, have no alternative but to be wound up”.
A case for requiring market criteria to be considered in deciding whether a deed of company arrangement is appropriate
An alternative, critical, perspective is that restructuring is
“a legal regime based on derogation and favouritism, which, if on the one hand helps the firms survive, on the other, it ends up altering the level playing field [and might prove] undesirable or even unworkable under competition law”.[5]
Insolvency’s more limited perspective may be said to conflict with the more measured and long-term perspective of competition law.[6]
In a review of a Sydney Law School seminar[7] in April 2025 – have corporate rescue laws gone too far? – Dr Arthur Emmett acknowledged the idea of some market assessment being required, writing that
“It would be impracticable to require that an administrator have regard to full market evidence before proposing a deed of company arrangement. However, there may be a case for requiring market criteria to be considered in deciding whether a deed of company arrangement is appropriate and the terms of any proposed deed. It may be appropriate to consult the competitors of a company proposing a deed of company arrangement as well as its unsecured creditors”.[8]
In reality, few cases directly raise both insolvency and competition issues, of substance. In that respect, even if there is a lack of market scrutiny, insolvency law can’t do too much damage. But some analysis should be undertaken.
Economic data needed
While substantiation of an impact on competition is difficult, perhaps more so in this context, the value of and need for it has been discussed in the context of pre-packs in the UK, these being an example of an insolvency process that can be anti-competitive.
Van Schadewijk,[9] for one, has called for “research on the economic effects of pre-packs on competitors and the market” to gain
“better insight into how many pre-packs genuinely economically harm competitors, and on what kind of markets”,
including on whether they have a positive effect on the market and the consumer.
He explains that economic research would shed more light on how the anticompetitive elements “weigh in against each other”, that is, whether a pre-pack is anticompetitive in all or only some of its aspects, allowing more focused law reform attention.
He takes this to a rather dramatic conclusion, that
“any finding that competitors suffer considerable economic harm in a substantial amount of cases could ignite a discussion on the anticompetitive effects of other business rescues procedures, or even corporate rescue in general”.
Other issues
There are other issues in relation to the connection between competition, mergers and insolvency, the “failing firm defence” being one which allows, under certain conditions, authorisation of an anti-competitive merger with an acquired company in difficulty, which can call for an assessment of the neutrality of the merger on competition.[10]
State subsidies of ailing industries are another, more lively an issue in the UK and EU, with the UK’s Subsidy Control Act 2022 prohibiting subsidies for ailing or insolvent enterprises unless certain conditions are met to ensure that those subsidies do not prevent market competition.
The ATO acknowledges that non-payment of tax by a business gives that business an unfair competitive advantage. That the ATO facilitates tax concessions as an uncompetitive form of de facto state subsidy, for example through Part 5.3B, and whether that is of consequence might usefully be more closely examined.[11]
Some basic research into these broader issues of insolvency and restructuring would be wise, for government and industry. They are beyond the more limited issues raised by ARITA and TMA. They probably warrant a separate consideration.
That would usefully be pursued through any comprehensive review of insolvency, as called for by the 2023 PJC Report, with economic analysis and data brought in to assist.
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[1] TMA Australia Submission to Treasury on New Merger Control Regime; Submission: ACCC merger notification reforms
[2] Competition and Consumer (Notification of Acquisitions) Determination 2025, s 2-21.
[3] Merger law overhaul risks killing company rescues, Genevieve Sexton, AFR, 1 December 2025.
[4] xx.
[5] Insolvency, Competition, and the Theory of the Firm, Vittorio Minervini, (2021) 32(4) European Business Law Review pp. 743 – 768 at 749
[6] The interaction of insolvency law and market competition (2025) INSLB 75, Murray
[7] Have corporate rescue laws gone too far? Sydney Law School seminar review – Murrays Legal
[8] Butterworths Corporation Law Bulletin, July2025
[9] Matthijs Van Schadewijk (2017) 5 NIBLeJ 2, Pushing the Boundaries between Competition and Insolvency Law: Pre packing in the UK
[10] ACCC, Merger assessment guidelines, June 2025, at B.11-B.12.
[11] Should aid be granted to firms in difficulty? A study on counterfactual scenarios to restructuring state aid, prepared for the European Commission, 22 December 2009.
